Semi-truck sales doubling means economy is growing and Trump's tax cuts are working
Harrie Schippers, pictured above, President and Chief Financial Officer of PACCAR, said the Trump tax cuts are responsible for his industry's and his company's record profits and sales.
The tax cuts generated "positive cash flow for PACCAR as well as benefit the transportation industry in the United States," said Schippers.
His company builds Kenworth, Peterbilt, and DAF semi-trucks. These are heavy-duty trucks used to pull trailers in long-haul routes.
PACCAR has 30.7 per cent market share.
Increased truck sales started in December when trucking fleets in North America ordered 37,500 new trucks. This was up 76% from the year before. It marked the strongest monthly demand for new trucks in three years, according to ACT Research, an industry group.
New truck sales were 133,000 in January, February, and March. This was also double the year before. February was the eighth best month for new rig sales in the industry's history, according to FTR, a company that released an industry report Tuesday.
Why did semi-truck sales double?
Demand to move goods by truck increased. People and companies had more to spend because they are paying less taxes. To meet the demand, trucking fleets needed new rigs. If they failed to buy new semi-trucks, they would lose business to the fleets who did.
What was the difference from a year ago?
Donald J. Trump is President. Trump's tax cuts became law Dec. 22nd.
Semi-truck makers have a back log of orders and are at a three-year high, according to ACT Research, a transportation equipment analysis group.
One of the first indicators of a growing economy is truck traffic. When it increases, the economy expands too.
Laid off workers at Volvo and Daimler have been recalled. That is another indicator that the economy is getting better too.
Volvo has recalled its laid off workers because of the increase in demand to move things by truck.
Demand is far from peaking according to industry analysts at Stifel. They anticipate next year to be even better for new truck sales.
A problem? The trucking industry is facing a labor shortage. They are unable to find drivers to drive their rigs.
Last year “driver shortage” ranked as the trucking industry’s top concern for the first time since 2006, according to the American Transportation Research Institute.
Last year an aging work force was blamed for the decline.
This year, the driver labor shortage can be blamed on the "Trump Bump", an expanding economy.
Drivers are apt to blame low wages. Long-haul truckers make an average of $55,000 a year. They would make twice that driving rigs for the oil-and-gas industry, said Bob Costello. He is Chief Economist for the American Trucking Association.
Navistar builds International Trucks and GM-branded units primarily for industry use. Their truck unit had a seven million loss. The year before the loss was $69 million.
The official company position on President Trump's economic policies is:
“If these (Trump's) tariffs are enacted, there’d be a significant impact to the commodities that are key components of commercial vehicles, making them more expensive for us to make, and ultimately, for our customers to purchase. Until seeing the final executive order, we’re not going to speculate further on the impact of this tariff," the company stated.