PHILADELPHIA, PA – While Canada was naturally not the main topic of conversation during a discussion of trucking and economics during the American Trucking Associations’ Management Conference and Exhibition in Philadelphia, PA, on Sunday, one leading economist gave his thoughts about it.

“Canada is a little bit of a problem here….and Canada is actually in a recession now,” said Nariman Behravesh, chief economist at the business analysis firm IHS Inc. 

The reason can be summed up in one word. Oil.

While it may be good to be a leading supplier of oil in a world that craves the black gold, when prices drop by half, as we have seen over the past year, things turn lower for an overall economy that relies so much on crude.

“Oil is about 10 percent of the Canadian economy but it’s about 2 percent to 3 percent of the U.S. economy,” Behravesh said. “Western Canada, especially places like Alberta, is very exposed. You could argue this, but it’s in a fairly deep recession. So is North Dakota….but the point is the Canadian exposure to oil is pretty big.”

Meantime, on the U.S. side, the trucking industry should see freight volumes increase toward the latter part of 2015, said ATA Chief Economist Bob Costello during the discussion.

“Right now, we’re in a bit of a soft patch because inventories are higher than one would expect. Once that normalizes, we should see a healthy rebound in freight volumes,” he said.

Costello said even though business is generally good across the sector, fleets are having difficulty adding capacity because of a dearth of qualified drivers – a problem Canada is also dealing with.

“We reported earlier this month that by the end of the year we expect the driver shortage to balloon to about 48,000,” he said. “This shortage is preventing many fleets from capturing additional business because they just do not have the drivers. The lack of qualified drivers remains a tremendous threat to continued industry growth.”

Even without capacity expanding, Costello said sales of Class 8 trucks should remain strong as fleets replace older trucks with newer ones.