SAN ANTONIO, Tex. – An economist, a banker and an investor made up a panel examining the state of the U.S. economy at the American Trucking Associations’ (ATA) annual conference, and each of them were optimistic about what’s in store for ’04. Tom O’Bryant, senior vice-president and managing director of Chicago, IL-based LaSalle Bank, said “All of us are painfully aware of what has occurred over the past three years in trucking. But there are indications that good times are on their way.”

He went on to suggest low interest rates and inflation have helped the ailing U.S. economy in recent months, and said third quarter reports recently issued by public carriers show strong top-line revenue growth.

“The question becomes, is the momentum sustainable?” he asked.

Bob Costello, chief economist and vice-president of the ATA, says one of the key trends to watch will be inventory-to-sales ratios. “That’s very lean right now,” he said. Costello said some of the negatives concerning the U.S. economy include the loss of more manufacturing jobs.

“I believe we’re going to see some job growth but a lot of manufacturing jobs are gone (for good),” he predicted. He added capacity utilization is low in the manufacturing sector. Other causes for concern are the fact that many companies remain “risk-adverse.”

“A lot of businesses are too pessimistic and can we blame them? No, we can’t,” said Costello. He also added “We haven’t had a lot of help from the rest of the world,” during the recent downturn in the economy. Having said that, the U.S. represents one-third of the global economy. Fortunately, there’s some good news as well to help offset the ongoing challenges. Tax cuts under the George W. Bush administration being one of them, according to Costello.

“Those tax cuts have helped. They have kept consumer spending up,” he said. A weaker U.S. dollar is helping the economy, but Costello pointed out it’s still 30 to 35 per cent higher than it was in 1995. All in all, Costello said “We have a lot of positives going forward.”

He said job losses in the trucking industry have dropped off and he expects rates will begin to increase. Truck tonnage is getting back on pace after a drawn-out decline during the recession.

“We’re still not back to our peak in the late-’90s (in truck tonnage) but we’re getting closer,” he said. “In trucking, I see improved freight volumes, especially for manufactured goods. If you’re hauling manufactured goods, the growth rate is better (than average) because there’s some pent up demand there.” The real GDP growth for 2004 is estimated to be about four per cent, said Costello. Fuel prices are expected to remain volatile (yet not as high as in ’03) and insurance rates remain a problem, although not as much as they were this year, Costello said. Upcoming changes to the U.S. hours-of-service will result in more driver jobs, he added. “There’s no doubt this legislation is going to increase the number of trucks and increase the number of drivers on the road,” said Costello.

Bill Buford, managing director of LaSalle Debt Capital Markets in New York, said it’s a good time to seek new capital to finance growth. “There is more investment capital available than there is issuance. The investment community has excess funds to invest because fewer people are borrowing,” he said, adding he too expects better times ahead. “The economy will turn the corner and pick up steam next year,” he said.