Heavy truck sales fall as the United States is heading for a recession
Follow-up of data The volume of sales of large trucks in the United States flashes a warning sign on the state of the economy. Sales of heavy trucks – or those exceeding 14,000 pounds in gross weight of the vehicle – have fallen at levels not seen in four years, according to the American office of economic analysis. The volume is down more than 15% in August a year ago and 21% compared to the same month in 2023. Economists and investors have historically followed the quantity of these vehicles – think that trailer trailers – are sold in the United States as a leading indicator for the economy. Indeed, these trucks are considered vital for American manufacturing and construction. When truck sales are increasing, this can be a sign of growing industrial action. On the other hand, the sliding volume may indicate the contractions in the American economy – and has historically preceded the recessions. “The recent slowdown in heavy truck sales, which began in 2023, should be a concern for decision -makers,” wrote Joe Brusuelas, chief economist of RSM, wrote to customers in a note explaining the link between the collapse of sales and recession. The period around the global financial crisis in the 2000s offers an excellent example of this trend. Sales volumes plunged more than 67% of a summit in 2006 in mid-2009. Looking further, sales dropped by around 50% of a peak at the end of 1999 to a hollow at the end of 2002 while the Dot-Com bubble shook the national economy. But economists have noted that it had not always been a perfect indicator of future recessions. While artificial intelligence reshapes the labor market, some wonder if the drop in current volume can instead highlight the current change in the economy. “Weakness certainly reflects a slowdown in the manufacturing sector,” wrote Paul Hickey, co-founder of the tailor-made investment group in CNBC. But “the fact that the global economy continues to grow is another signal of the evolutionary nature of the economy to services and digital activity as opposed to manufacturing”. In other words, Hickey said it could be a sign of the change “Bricks to Clicks” in the American economy. This refers to the transition from the growth of industrial roles which can involve literal bricks to technological sectors linked to the Internet. “The drop in sales is often a recession indicator,” said Hickey. “The keyword is often.” However, sales of heavy trucks have rebounded at close peaks after a pandemic drop even with the technical transformation during the economy. This recent drop in this year must therefore have something to do with the state of the economy. Investors will soon discover if it is only a slowdown or something bigger.
