Ontario Trucking Association

Ontario Trucking Association

July 23, 2009 16:53 ET

Bellwether Trucking Industry Sees Signs That Worst May Be Over for Canadian Economy, but Ontario, US Yet to Hit Bottom

TORONTO, ONTARIO--(Marketwire - July 23, 2009) - The trucking industry is one of the best leading indicators of economic activity there is. Truckers, who haul virtually everything that individuals and businesses consume and produce everyday, are usually first in and first out of economic cycles. So, if the latest Ontario Trucking Association Business Pulse e-Survey is any indication, there may be some light trickling into the end of the recessionary tunnel after all. The survey of trucking companies conducted between July 6th and July 20th, 2009 indicates that the bellwether industry is less pessimistic heading into the third quarter. The gap between the proportions of responding trucking companies (or carriers) that are pessimistic versus those who are optimistic about the industry's prospects over the next three months has virtually vanished at 32% each. (In the second quarter survey the gap between the pessimists (43%) and the optimists (27%) was 16 percentage points. In the first quarter survey the gap was a whopping 35 percentage points). Still, there is a lot of uncertainty. An almost equal share (35%) of the respondents remains unsure about prospects for the next quarter, compared to those that are either optimistic or pessimistic.

Another indication that the worst may be over - at least in terms of the national economy can be found in the slight majority (52%) of respondents who felt that the Canadian economy had hit bottom - a big jump from the 25% who felt that the national economy had hit bottom at the beginning of the second quarter. The news is not so good for the Ontario economy. A majority of carriers (54%) still feels that Ontario has not hit bottom. However, even here the gap between those who feel the worst may be over and those who are not so inclined has narrowed considerably. The percentage of carriers who think the province has reached bottom increased sharply to 46% from only 19% in the second quarter survey. 63% stated that some of their customers were extending normal summer plant shutdowns.

Unfortunately, a significant majority (66%) still see further problems ahead for the US economy, which no doubt is clouding the outlook for Ontario's export-based economy. While the survey clearly confirms there has been a major deterioration in Ontario-US trade volumes - trucks haul about three-quarters of that trade by value - the vast majority of carriers said they felt that southbound and northbound volumes would remain about the same for the next six months. At the same time, it is interesting to note that more carriers (26%) say southbound freight volumes will actually improve over the next six months than those who see further deterioration (16%). This is a marked shift from previous quarters.

OTA president, David Bradley, says that "while the results may indicate that the economy is inching its way towards staunching the bleeding, things are still very uncertain, especially for Ontario. What we are seeing is an indication that economic activity may have or may be approaching the point where it has found the bottom; we are not seeing signs of meaningful growth and recovery at this point. There are so many variables right now - the US economy, the recent appreciation of the dollar, the availability of credit - that continue to overhang our view of things. I would characterize our outlook as being slightly more hopeful than optimistic at this point."

Contact Information

  • Media contact:
    Ontario Trucking Association
    Doug Switzer
    Vice President Public Affairs
    (416) 249-7401 x 238