LAS VEGAS — The worst will likely be over by the time 2008 is done, but there’s still no quick fix for the American economy and freight volumes, a group of economic forecasters told a theatre full of truck manufacturing execs yesterday.

Speaking at the Heavy Duty Manufacturers Association’s (HDMA) Heavy Duty Dialogue conference here in Las Vegas, Martin Regalia, chief economist for the US Chamber of Commerce predicted a 45 percent chance the U.S. economy doesn’t get out of 2008 without being hit by the dreaded R word — recession. The good news, though, is that there’s a better than 50 percent the eye of the storm could be avoided.

The economy is not hitting on all cylinders and there are significant weak spots,” Regalia said, pointing out housing and lending sectors as two of the more obviously troubled industries.

There is, however, “a light at the end of the tunnel, that’s not attached to an incoming train,” Regalia continued. While the numbers are bleak, he said that wage levels in the U.S. are growing marginally, and if wealth keeps steady, then consumer spending — and in turn, shipments — won’t be dragged down much further. “As long as we have consumption, we’ll probably be all right.”

If consumers’ ability to buy goods continues to
corrode, so will truckers’ ability to ship them.

Regalia said that U.S. President Bush’s recently proposed $150 billion economic growth package could help spur consumer confidence. The package — most of which is aimed at tax breaks for individuals — could help the country sidestep a full-blown recession.

Chris Brady, of trucking market forecaster, CMVC Consulting, was one of four analysts to suggest that the industry could see signs of an upturn after the second quarter of this year. However, he added, recovery would be very gradual.

“There’ll be no snap back,” he said, since carriers’ capacity utilizations rates remain low and most truckers these days don’t have the pricing leverage to pass along costs.

The first truck sales predictions for 2008 were also thrown around at Heavy Duty Dialogue. Generally, Brady, Kenny Vieth, partner with A.C.T Research, and ML Associates President Martin Labbe, suggested between 230,000 to 250,000 North American class 8 factory sales in 2008 and up to 270,000 in 2009. The animated Stu MacKay of MacKay & Co. was more pessimistic, suggesting a “base core” demand of only 200,000 U.S. sales this year.

“The market will be based on not much more than replacement demand,” he said.

All the panelists acknowledged that an array of “wildcards” — the price of oil and the scale of another pre-buy in advance of the 2010 emission regulations, for example — could quickly change those projections.

Looking beyond this decade, Regalia warned of the possibility of more volatility even if the economy starts to recover in the short-term. He noted that about $3 trillion in tax cuts expire between 2012 and 2014, and if something’s not done to preserve them, then “that’s $3 trillion in tax increases.”

That kind of added cost on taxpayers — plus inflation and the burden to fix U.S. health care and a crumbling highway infrastructure — could seriously corrode consumers’ ability to buy goods, and therefore, trucking companies’ ability to ship them, Regalia says.