ATLANTA — Nonresidential construction and consumer spending trends bode well for the LTL trucking sector in 2025 and beyond, economist Keith Prather said at an industry trade show Monday.
The U.S. is spending about $235 billion per year in factory construction, four or five times its usual rate, said Prather, managing director and co-founder of Armada Corporate Intelligence, at SMC3 Jump Start 2025.
“A lot of that output isn't rolling off the assembly lines just yet, but it will start,” he said. “So your distribution center systems, the volumes you see from those distribution systems, a lot of that may start changing the next couple of years, and I think that number is going to accelerate.”
Boosted trucking demand in 2025, particularly for more profitable industrial shipments, could bring a welcome end to a two-year freight recession spurred by a prolonged manufacturing contraction. The sector remained weak but saw gains in new orders and production metrics from November to December, according to the Institute for Supply Management.
“Generally, we're starting to see a mild uptick,” Prather said of hints of manufacturing improvement.
More consumer spending stands to improve retail shipping demand, too, the economist told an audience of trucking and logistics executives at the Renaissance Atlanta Waverly Hotel & Convention Center.
Inflation has depressed discretionary spending of around 78 million lower-income households, a trend that could reverse thanks to average wage growth at about 4% outpacing inflation of roughly 2.5%, he said.
“That gap helps these 78 million households build a little wherewithal to start to dig out of the economic situation they're in,” Prather said. “Wholesalers and electronics and apparel, sporting goods, all those discretionary categories? Look for them to come to life again in 2025.”
Tariffs proposed by President Donald Trump are one of the biggest uncertainties facing trucking, according to the economist. But the Office of the U.S. Trade Representative granted more than 18,000 exclusion requests during Trump’s first term, Prather noted.
“That’s the good news,” he said. “The bad news is when you look at the impact: $228 billion of revenue estimated to be general economic income based on these tariff applications.”
Carriers planning for the upcoming year also should be aware that their customers are increasingly prioritizing trustworthiness, said Kevin Huntsman, president of Mastio & Co., which surveys shippers annually.
“I don't know if that's a byproduct of Yellow going out and just some distrust in the market and some changes there,” Huntsman said. “That movement of importance was very interesting.”
