WILL THE ECONOMY GET ROLLING, ALONG WITH THE SEMIS?
While car and light-truck sales seem to be accelerating, economist Diane Swonk of First National Bank of Chicago notes that another bellwether sector of the motor-vehicle industry is also flashing bullish signals for the economy. Heavy-truck sales have taken off and were up 44% over their year-earlier pace in the first quarter.
Heavy trucks, the big 15-ton-plus diesels that pull monster trailers along the interstates, are used by heavy
manufacturers to haul parts, capital equipment, and the like to industrial customers. Behind the pickup, says Swonk, are low interest rates, pent-up demand, the need to meet new emission standards, and strong demand for used trucks from Mexico. But the biggest spur to heavy-truck sales--which may hit 140,000 this year, the best
since 1979--is an improved bottom line.
"Strong productivity gains, slow wage growth, continued export strength, and a modest recovery in auto and machinery sales have combined to give heavy manufacturers a shot in the arm," says Swonk. "That's what's showing up in heavy-truck makers' order books."GENE KORETZ