Automotive sector remains hot in June, up 1.9%
August 8, 2012
Production and movements of auto parts was stronger than anticipated in Q2, mainly led by a strong uptick in April. The year-0ver-year growth rate jumped higher during Q2 with gains well above 20%. Automotive loadings were at 3.841 million in June, up 1.9% from May, following a decline of 0.9% the prior month. The year-over-year gains are very strong, up 23.1% in June.
After small declines in 2006 and 2007 automotive freight dropped 11.9% in 2008 and a further 17.6% in 2009. Loadings jumped in mid-2009 but grew at a slower pace during 2010; however, annual growth in 2010 was strong at 11.3%. Volumes were stable for most of 2010 and 2011 before starting to move dramatically higher in October 2011. 2011 ended with an annual gain of 4.1%. There was a modest reduction in volumes during 2011Q2 on the heels of Japanese supply disruptions. Since then, year-over-year gains have shown a dramatic surge with the last 2 quarters hitting double-digit growth. Quarter-over-quarter gains have topped 5% for the last 3 quarters.
Volumes are expected to flatten over the next couple of quarters but will remain at a very high level. The near-term pause is likely to keep year-over-year growth under 20% during the second half of the year. Once we get into 2013 the prior year comparisons will be reduced but the market should still see strong volumes. We expect to see growth above the industry average for the next few years.
After the 2011 gain of 4.1% we should see very strong growth in 2012, up 16.2%. Growth will then slow down but remain above the industry average, up 5.5% in 2013 and 6.6% in 2014.
Revised data added ~500 bp to year-over-year growth – now above 20% during Q2. Most of the gain came during April as volumes stagnated some in May and June. The automotive sector has paused recently, following a very strong spurt of growth from late 2011 through the second quarter of 2012. The weak spot should stretch through the fall before we start seeing sustained monthly increases again. Continued sales gains will lead to continued production increases and further truck movements. The auto sector is leading all segments in terms of growth during this recovery. Despite the pause we are at a relatively high level of activity.
Automotive production was at a high level during the early and mid-2000′s but it was not in a growth mode. Production and sales are at a lower level right now have been growing and are contributing a significant amount of growth to this recovery.
Automotive is mainly movements of component parts but also includes both finished autos and other transportation equipment. FTR’s data is seasonally adjusted and measures both short and long-haul OTR segments.
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