If the stimulus plan works, one of the first areas where we expect to see job growth is in the transportation and warehousing sector. Even before cash moves into construction, the trucking and distribution industry should experience a jump in demand as commodities, raw materials and finished goods make their way to the job sites. Unfortunately however, we have not yet detected any turnaround in transportation and warehouse job ads. And we have reason to believe that we will be able to detect that turnaround in advance.
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As shown in the chart, the number of new ads in the transportation/warehousing sector (NAICS codes 48-49) plummeted in the first few months of the recession, even as the number of actual jobs held steady. We expect employers may exhibit a similarly dramatic increase in the ads they run at the earliest signs that demand for their services is rising.
However, if the declines in ads (and, by extension, actual jobs) continue, that may be an even more troubling sign about the state of the economy than would first appear. That's because long before the recession began the trucking industry in particular was suffering from a driver shortage.
WANTED Technologies forecast a loss of 61,000 jobs in the sector in February. On March 6, BLS reported a loss of 49,300 jobs in transportation for February. WANTED's analysts believe BLS may revise that number lower within the next few weeks.
Factory slowdowns translate to empty trucks
Before you can put a product in a truck or store it in a warehouse, someone has to build it.
And, as the Econbrowser blog points out, that isn't happening. Industrial production is now "lower than at the corresponding point in any previous post-War recession," economist Menzie Chinn writes.
On the bright side, folks with factory jobs are producing more stuff than ever
Freight Index falls for a third straight year
The Department of Transportation's freight index, which measures the total output of trucks, railroads, barges and other transportation modes, was down 3% in 2008, according to the latest figures from the federal government. That marks the third consecutive decline in the index.
Turnaround coming? Baltic freight says not yet
For awhile, the Baltic Freight Index, which measures the cost of transporting commodities around the globe, suggested that worldwide demand for the transport of raw materials might be climbing. But optimism was short-lived. In mid-February the index fell 10% in a week as demand softened in China.
Truck manufacturers face difficult 2009
Few sectors of the economy face a tougher road in 2009 than truck manufacturing. As noted in this article from Fleet Owner magazine, truck production in 2009 is expected to be nearly 25% lower than 2007 and 22% lower than last year.
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