0 Comments Bookmark and Share

2015 Economic Overview: You’re going to be busy.

TORONTO —  "I predict that between 2030 and 2035, we'll have roads designated as 'driverless-only' roads," Thomas Frey of the Louisville-Colorado-based DaVinci Institute, a man described as Google's "Top-Rated Futurist Speaker" told truckers at the Ontario Trucking Association's (OTA) annual conference in November. 

The picture Frey painted of future trucking could be viewed as either desperately grim or eye-squintingly bright.

Driverless-only roads will be much safer, he says. And there'll clearly be less demand for OTR drivers.

Now pair that with the advent of 3-D printing, which he foresees as having an impact that's "bigger than the Internet." Chinese researchers have already produced, if you can believe it, 3D-printed houses, created in 3D-printed factories.

Or visit www.localmotors.com. You'll see how people are producing 3D-printed cars. Really.

What's to become of trucks that deliver construction materials or auto parts?

For one thing, Frey says, people will still need stuff; but localized production will be increasingly important. "Manufacturing will shift to local; and customization will expand. We'll be about to customize everything."

"Also, the Internet of things will virtually eliminate theft because we'll be able to track everything."

Frey's dog-and-robo-pony show trekked the audience from international high-speed travel via tube to Google contact lenses. "We're already shipping water, oil and other products via pipeline, why not people and freight?"

And the lenses on his high-tech glasses are indeed rose-colored. Frey's future is bright if radical. "Research shows that for every job lost by the Internet, more than two are created in the online world," he said.

No wonder the people who organized the OTA conference asked Frey to address the troops. "The future creates the present," he said, "It's images of the future that we have in our heads that determine our actions today.

"The main reasons companies fail is because they missed the future," he said, "I kind of agree with that."

Of course while you're waiting for your new car to roll off the printer, you might want to concern yourself with shorter-term business concerns.

And you don't need Frey's crystal-ball (he really does carry one around with him, for laughs) to see which way trucking's headed over the next little while. Because all indicators seem to show that over the next few months, it's headed one way: Up.

Exhibit A: Between June and August, GE Capital surveyed a bunch of people in the trucking industry across Canada to get their views on the past, present and future of their industry.

Respondents represent companies with revenues ranging from $1-million to $1-billion.

And boy are they bullish.

Here's a sample of the survey results:

• A majority of truckers increased their revenues over the past year, and 60 percent of them added jobs;
• More than three quarters expect increased revenue next year; and almost two thirds expect to hire new staff, too;
• Everybody's worried about the driver shortage. It's no longer the bogeyman waiting around the corner. Economic growth is creating strong demand and nearly all firms expressed concerns about recruiting and retaining qualified drivers.
• And the trucking industry is less reliant on innovation for growth, and "adoption of new fuel technologies is likely to remain low for the foreseeable future."

Likewise, in its annual survey of members, the OTA found truckers to be very optimistic about where things are headed.
• 47 percent of the carriers said intra-Ontario freight volumes improved in the previous three months; a six-point jump from the Q2 survey;
• Three percent reported lower volumes within Ontario;
• 53 percent said volumes increased intra-provincially;
• 55 percent of carriers reported increased freight volumes for southbound U.S. lanes.

"Remarkably, for the second straight survey, no one reported decreased U.S. volumes – the first time ever that's happened and an obvious indication Canadian carriers are aided from an improved U.S. economy," the OTA claimed.

The U.S. economy is no longer in "recovery mode." It's growing.

Couple that with Canada's low dollar, and you get work for Canada's previously waning manufacturing sector.

In a remarkably candid take on where the economy's headed, a Managing Director of the National Bank of Canada Stefane Maron told the Atlantic Provinces Trucking Association (APTA) that as of September, the U.S. economy is officially in "expansion mode" and it's taking Canada right along with it.

"We're looking at 3.6 percent growth in Canada," he said. Canada will also, he predicted, get an economic jolt in the lead up to the next Federal Election.

"We'll get a fiscal stimulus before the election and that'll stimulate the economy."

Maron also mentioned — as have reappearing headlines recently — the fact that freight traffic has been reaching historically high levels across North America.

Combine that with strengthening job, construction and retail sales numbers across North America, and you have to conclude, he says, "things are looking up in the U.S."

Experts agree that lower fuel prices will be with us for the foreseeable future and while that might take the glow off alternative energy sources and/or surcharges, other analysts say it will lead to an improved market for other products, the prices of which depend on the price of oil.

Craig MacAdam is a Portfolio Manager with the Equity team at the investment firm Aurion Capital, and he, echoed Marion's bullishness at the APTA conference.

"The Canadian economy one of the best in G-7 with regard to debt to GDP ratio," he said.

MacAdam was touting one of his company's top-performing funds in his presentation and was actually giving personal investing advice, but in doing so touched on several key growth areas in the Canadian economy.

It's time for Canadian investors, he said, to stop focusing on previously sure-growth stocks like oil and gas and peer into what he calls "the belly of the economy."

"I'm talking industrials, discretionary materials, consumer staples, health, finance and info-tech." Low energy prices will boost stocks like Loblaws and manufacturing companies that benefit from lower energy costs.

Scotiabank's Chief Economist and Senior Vice President Warren Jestin carried a similar message to a fall luncheon of the Toronto Trucking Association (TTA).

"The U.S. is buying more cars and that's good for the folks in Oakville and Oshawa," he said.

Investors are putting more money into the U.S. because of its safer economy and decreasing deficit and "they see a consumer culture that's back in the game."

China, too, is still in growth mode, albeit more subdued than in previous years. "It's still the biggest automotive market in the world, selling more cars to its people than are sold through all of Europe."

Here at home, Jestin reported—surprise, surprise—Canadian growth is best out west, but that benefits the entire economy.

"We're still the envy of others," he says. "Canada is the best country to live in, in the world."

Email Editor

Filed Under:
2015 economy economic overview forecast trucking industry business global