The 2019 Surface Transportation Summit took place last week at the International Centre in Toronto. The event was co-hosted by Newcom Inc. and Dan Goodwill and Associates, in partnership with the Ontario Trucking Association, the Freight Management Association of Canada and the CSCMP Toronto Roundtable. Hundreds of shippers and carriers attended the event to learn from the various presentations and panel discussions and to network with other industry professionals.
Josh Nye, Senior Economist, Royal Bank of Canada, kicked off the day by sharing that the global economy has lost momentum, particularly in the industrial sector. Canadian manufacturing has not declined as fast in the United States. Protectionist trade policies are having an impact and are having a downside risk on the outlook. The yield curve is pointing to a heightened risk of recession in the next year or two. At this point RBC expects slower growth, but not a recession.
To maintain economic growth, the banks have shifted to easing monetary policy. The transport sector has slowed alongside industrial production; confidence has declined recently. A strong labour market has supported income growth and given consumer spending a slight boost. Similarly, business sentiment has taken a hit; firms are still planning to invest but capexes will take a hit. Non-energy exports have lost momentum.
David Ross, Managing Director, Global Transportation & Logistics, Stifel Financial Corp. spoke about the “mini freight recession” in the United States this year. He highlighted that the ISM (Institute for Supply Management) Manufacturing Index has dipped below 50, signaling a contraction in production. Strong employment and consumer sentiment have boosted retail shipping. We will need to monitor this index to see if this signals a downturn in the economy.
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