For a picture of how rapid and steep the decline in U.S. manufacturing and retail sales has been in this recession, there are few better sectors to look at than transport. Freight volumes everything from raw materials to durable goods have plummeted virtually across the board, making forecasting demand near impossible.
"We've downgraded our forecasts several times already this year and it's only March," said John Levine, president of Pinsly Railroad Co, which owns short-line railroads in Florida, Massachusetts and Arkansas. "Business has fallen off in a way that none of us have seen."
To weather the slump, Pinsly has cut back hours for workers so all of its 150 employees are still working, he added.
According to data from the Association of American Railroads (AAR), rail carload traffic for the first two months of 2009 was down 15.8 percent.
Historical data shows the drop in U.S. manufacturing activity eclipses the recessions of the 1980s and 1970s and in terms of speed and scale it is comparable with but not as bad as the Great Depression before World War Two."We are in the worst contraction since the Great Depression," said University of Maryland economist Peter Morici. "This is it."
Truck firms are on the U.S. economy's front line and have already been in a "freight recession" since late 2006. But they too have been slammed by a further drop in demand."We're getting hurt on the business side, capex is down and consumers aren't spending," said Bob Costello, chief economist for industry group the American Trucking Associations (ATA). "We're getting hit from all angles."
The ATA's freight tonnage index fell 10.8 percent in January. U.S. nonfarm output saw its greatest drop since 1982 in the fourth quarter, according to the U.S. Labor Department.
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