A slowly recovering economy is creating an increase in new housing and manufacturing, and will increase freight.
This week, the Department of Commerce reported that housing rose 2.6% in April to 717,000 up from 699,000 in March. Additionally, industrial production climbed 1.1%. Both sectors have hit a two-month high.
“After bottoming in 2009, the U.S. housing sector has had little to no substantial growth; however, today’s housing starts now show an increase for the first time in three months, and coupled with indications of improved conditions, are suggesting a turn for the better,” said Jennifer Lee, senior economist, BMO Capital Markets.
The Midwest and southern states are leading the new housing spike.
Todd Fowler, an analyst at Key Bank Capital Markets told Bloomberg that the average new house requires between five and eight truckloads of supplies.
Experts say that if new housing numbers reach 750,000, 4,000 new trucking jobs would be necessary.
Landstar CEO James Gattoni disagrees with the estimate, saying that from his company’s perspective housing hasn’t gown enough to create the need. Landstar is a flatbed freight shipping company.
A spike in new housing would create a boom in manufacturing. Manufacturing accounts for 75% of all production. It rose 0.6% in April.
The rise in numbers of auto sales and durable goods also create a increase in manufacturing.
This is all good news for flatbed carriers and signals a recovering economy.