ACT For-Hire Trucking Index: May Data Rebounds After “Worst Readings” In History
JUN 24, 2020 - 6:30 am
May data from the ACT Research For-Hire Trucking Index showed significant improvement in all five diffusion index measures tracked. May’s volume index rose from 19.3 in April to 50.2, with capacity also at the neutral 50 mark, and pricing and productivity both in the mid-40 range.
“After the worst reading in survey history in April, the volume index increased 30.9 points in the largest month-over-month increase in survey history in May,” Tim Denoyer, vice president and senior analyst at ACT Research, said. “While we’d characterize this as neutral territory, and it may be supported by inventory rebuilding following the draw-down in March and April, it is nonetheless a much more stable volume environment.”
Regarding the uptick in freight rates, Denoyer said, “The record 21.2 point recovery in May, also the largest month-over-month increase in survey history, to 43.0 means that despite effectively recovering all the ground lost in April, the pricing index remains in contraction territory. And while still tentative, the trends of a strong rebound in freight volumes as a capacity tightening cycle has begun shows a bottoming process is well under way.”
When asked about the overall picture, Denoyer explained, “It may be difficult to discern from the chart, but the supply-demand equation rebalanced in May, returning to 50.2 from 26.9 in April, as recovering demand overwhelmed the more modest uptick in supply, and shrinking Class 8 retail sales suggest equipment capacity will continue to tighten but with sidelined drivers likely coming back, and lenders extending loans, it may be a while before the market really tightens. In short, given the magnitude of the economic shock from the pandemic, the road back might be a long one.”
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