A decidedly upbeat take on the road ahead for motor carriers through the rest of the year is sounded in an extensively documented ‘Research Update’ on truck transportation prepared by GE Capital.

“Given strengthening freight trends coupled with still very tight industry capacity, the supply/demand equation continues to favor” motor carriers, points out the report’s author GE Capital senior research analyst Michael Zimm.

“Most freight indices continue to rebound strongly from a seasonal and weather- induced downtick early in 2014,” he relates. “Since January, monthly sequential freight trends have remained positive while year-over-year tonnage growth continues to easily outpace overall GDP trends.”

Zimm adds that “barring a significant and unexpected slowdown in economic activity, freight trends heading into the Fall should continue to benefit from an expected rebound in GDP growth coupled with normal seasonal strength of overall construction spending.

“Also on the plus side,” Zimm continues, “fuel prices have moderated slightly and Hours-of-Service (HOS) related operational inefficiencies continue to put a crimp in capacity”—which he notes “provides support for rising rates.”

The report also tags the healthy market for new trucks as another positive bellwether. It cites preliminary data from ACT Research that showed net orders (North America) for Class 8 trucks during June soared 41% year over year— putting them at their highest level for that month since 2005. And over the entire first half of 2014, ACT indicated that Class 8 net orders were up 28% over last year’s first half.

Net orders (U.S.) for Class 5-7 trucks are characterized by Zimm as “remaining very strong” but [they] have entered a period of increasingly challenging year-over-year comparisons. Nonetheless, monthly net orders during April were the best for any month since February 2008 and the best for that month since 2006. For the six months ending May, net orders are up 14% compared to the same timeframe a year earlier.”

Again attributing the underlying stats to ACT Research, Zimm says that “despite a nearly 6% decline in retail sales during 2013, retail sales of heavy-duty trucks have actually accelerated over the past three years in aggregate. As such, the percentage of trucks sold within the past three years-- compared to all trucks sold over the past seven years-- remains solidly above the ‘theoretical’ level where normal equipment replacement transitions into fleet expansion.

Although pointing out that the Dept. of Commerce estimated that GDP suffered its worst decline in Q1 since 2009, Zimm finds that “economists remain optimistic about significant improvements in GDP growth for the remainder of 2014. Currently, GE economists continue to expect GDP growth in 2014 to end at 2.6%, up from sub-2% in 2013.”

Citing the Federal Reserve, the report advises that the Industrial Production Index in May reached “a new all-time high” of 103.7 and was 4.3% higher than a year earlier. In addition, capacity utilization for the industrial sector increased by 0.2 percentage points in May to 79.1%. “This is 1.3 percentage points above the level of a year earlier, but still 1 percentage point below the long-run (1972- 2013) average,” said Zimm.

Turning to macroeconomic indicators, he says “the Purchasing Managers’ Index (PMI) —“a measure of near-term business conditions-- has rebounded strongly since a sharp drop in January. The June PMI of 55.3 was flat compared to May, but still well above the 12-month low of 51.3 in January.”

Another such indicator he details is the performance of retail sales and food services. Zimm says these sectorscontinue to rebound strongly from a January low. Year-to-date through May, retail sales were up 3.3% from the same timeframe a year ago, but still below the 4.4% growth during all of 2013.”

He also finds that two other strong indicators of U.S. economic health-- housing starts and light-vehicle sales--  “showed significant improvement” throughout 2011-2013.

“Following a weather induced trough in January and February, the annualized [housing start] rate of 1 million-plus for April and May remained well above the monthly annualized average of 929k for all of 2013,” he observes. “Likewise, following a weather-related pullback during the winter, the annualized rate of 16.7-million units during May was a new cycle high and a level not seen since February 2007” for light-vehicle sales.

Zimm also points out that “the rate of employment growth remains slightly above overall employment growth in the U.S. On a seasonally adjusted basis, [trucking] industry employment at the end of June was 1.9% higher than a year earlier.

“While the rate of [trucking] employment growth has moderated over the past few years and the absolute number is still below the peak of 1.47 million obtained in September 2006,” he continues, “the number of industry workers has risen steadily from a low of 1.24 million in March 2010.”

With an improving economy, though, it’s not surprising that Zimm finds the driver shortage to be as stubbornly acute as ever.

He refers to data released by the American Trucking Assns. (ATA) that indicated the annualized driver turnover for large truckload fleets rose 1% during Q1 92%-- marking the ninth consecutive quarter it’s been stuck above 90%. But ATA did also find that annualized turnover at smaller truckload fleets slipped 1% to 78% and turnover in the LTL truckload sector also declined 1%, landing at 10%.