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Sept.19. 2016

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SLOW GROWTH FORECAST FOR US ECONOMY, TRUCKING ELECTION YEAR POLITICS and strident eco- nomic rhetoric is depressing some consumer demand, and that's affecting freight markets and truckers' top and bottom lines, accord- ing to Charles Clowdis, managing director for transportation at IHS Economics & Country Risk. "There's a lot of pent-up demand that will only get spent after Nov. 8," Clowdis said during "Midyear Trucking Report: Is a Rally or Retreat Ahead?" a webcast avail- able on demand at JOC.com. The answer may be neither rally nor retreat, but a very slow rebound. Economic growth after the "soft patch" of 2015 to 2016 is "going to be slow," Clowdis said. IHS Markit, the parent company of JOC.com and The Journal of Commerce, forecasts US real gross domes- tic product will expand 1.9 percent in 2016 a nd 2.4 percent in 2017. Despite recent increases in industrial production and fac- tory output, "the industrial complex is not producing the level of freight necessary" to accelerate to a "robust freight economy," Clowdis said. Although US consumers are spending more, they are still cautious, he said. "Consumer confidence is high enough that you'll re-carpet one room, but not high enough t hat you'll re-ca r pet t he whole house," Clowdis said. He doesn't see that changing much until the US presidential election has been decided in November, and perhaps some time after. Real GDP expanded 1.1 percent in the second quarter, according to the latest estimate released on Aug. 26 by the US Bureau of Economic Analysis. Inventory reduction, increased imports and reduced government spending combined to keep GDP expansion low. That's up from 0.9 percent and 0.8 percent GDP growth in the fourth quarter of 2015 and first quar- ter this year, but the lowest second-quarter GDP growth rate since 2013. From late 2014 through the third quarter last year, GDP growth ranged from 2 percent to 2.6 percent. Although lower private inventory investment depresses GDP, it could reflect greater con- sumer spending and herald an increase in shipping demand. NY-NJ PORT CROSSES 50-FOOT CHANNEL FINISH LINE THE US ARMY Corps of Engineers and the Port Authority of New York and New Jersey have completed a $2.1 billion project, spanning more than a decade, to dredge the East Coast's largest port to 50-foot depth. "This harbor deepening may be the most important and inf luential project related to modern day economics in the Northeast," said Col. David Caldwell, the corps' New York district commander. "Modern-day container ships may now enter the port fully loaded and safely." Port Director Molly Camp- bell said completion of the project was "a major milestone." The deeper channel is scheduled to be followed by the end of 2017 by the raising of the Bayonne Bridge's roadway to allow larger ships to serve the port's largest terminals. Port officials had hoped to complete the raising of the bridge in time for this year's opening of larger locks at the Panama Canal, but severe weather and construction delays pushed back completion of work. With the 50-foot channel, New York-New Jersey joins Baltimore, Virginia and Miami as the deepest ports on the US East Coast. Charleston expects to leapfrog them in a few years with a planned deepening of its har- bor to 52 feet. The Port of Savannah expects to finish its harbor-deepening project, to 47 feet, in 2018. Spotlight 6 THE JOURNAL OF COMMERCE www.joc.com SEPTEMBER 19.2016 6 THE JOURNAL OF COMMERCE www.joc.com

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