In a lot of ways, the reluctance on the part of truckload carriers to expand their fleets is completely understandable, mainly because the overall economic environment remains weighed down by uncertainty.
For example, look at the results from a survey of small businesses released this week by TD Bank. While 60% of the 600 U.S. small business owners in the poll feel their business is performing at expected levels so far in 2013, the number of them saying they plan to hire more workers this year went down by half compared with data TD gathered in a survey conducted back in December 2012.
Jay DesMarteau (at right), TD Bank's Head of Small Business, said that only 17% of the small business owners participating in the survey (which was conducted by Angus Reid Public Opinion, the public affairs practice at research firm Vision Critical) plan to hire at least one new employee, down from 32% six months ago. TD also asked those small business owners who don't intend to hire in 2013 whether they would hire if circumstances made it possible – and 68% said they would not. They cited cost control (50%), worry that there wasn't enough work (49%) and lower sales and revenue (36%) as reasons for not hiring.
More broadly, those small business owners surveyed added that that their top three challenges ahead for the remainder of 2013 are: growing their business (51%), the economic environment (45%) and cash flow (34%).
"It's not surprising that small business owners still struggle to be optimistic or confident about performance in the current economic environment," DesMarteau noted. "Business owners are telling us they want to grow and expand, but they aren't ready to hire yet.”
However, one bright spot did emerge as more than three-quarter of the small business owners (79%) polled said they intend to keep staffing levels the same, up from 59% in December.
Indeed, there is good news to be found out there about the overall economy. For starters, take the Conference Board’s most recent Employment Trends Index (ETI) reading for April, which increased to 111.68, up from 111.61 in March, which is also 3.8% higher than the same month in 2012.
"Despite weak economic activity, the ETI is still signaling moderate job growth in the coming months," said Gad Levanon (at right), director of macroeconomic research at the Conference Board. "On average, employment has grown almost as fast as GDP [gross domestic product] over the past three years, and that is likely to continue into the third quarter of 2013. As a result, the average labor productivity of American workers will struggle to improve until GDP growth accelerates."
And yet other readings indicate economic activity is slowing. Take the Institute for Supply Management’s (ISM) most recent non-manufacturing indicator (NMI) metric, which dropped to 53.1% in April from 54.4% in March. While that means non-manufacturing activity continues to increase, the pace of such growth is slowing.
Other ISM metrics reflected that slowdown: the Non-Manufacturing Business Activity Index, for example, registered 55% in April, some 1.5 percentage points lower than the 56.5% reported in March; The New Orders Index decreased by 0.1 to 54.5%; and the Employment Index decreased 1.3 percentage points to 52%.
Economic activity in the manufacturing sector also slowed in April as well, with the ISM’s PMI metric decreasing 0.6 to 50.7%. While that still reflects expansion in the manufacturing sector for the fifth consecutive month, the pace is at the lowest rate of the year.
Other manufacturing activity metrics proved to be mixed, ISM reported: The New Orders Index increased in April by 0.9 to 52.3% and the Production Index increased by 1.3 percentage points to 53.5%, while the Employment Index dropped 4 percentage points to 50.2%.
In summary, it definitely still remains a mixed bag out there in the U.S. economy – and how long things stay stuck in such doldrums seems to be anybody’s guess at this point.