Planes, Trains & Automobiles (and Ships and Trucks)
Exports are a bright spot for the economy, increasing by 1.2 percent in April according to newly released data from the Department of Commerce. The weak dollar played an important role by making U.S. goods and services relatively cheaper overseas. Because imports fell in April by 0.4 percent (led lower by oil and autos), the trade deficit narrowed, meaning that net exports could be on track to make a better-than-expected contribution to second quarter GDP. The drop in imports could be temporary, however, as vehicle imports bounce back from the recent disasters in Japan.
Rail traffic reflects growing trade volumes and the expanding movement of goods through corporate supply chains. Year-to-date through May, rail intermodal loadings are up 8.5 percent from the same period last year according to the Association of American Railroads. One reason is that year-to-date volume at six major U.S. ports tracked by the AAR is up 8.2 percent from the same period last year, and rail service is needed to carry the containers to and from the ports.
Several indicators show that manufacturing activity has decelerated recently along with other sectors of the economy, but it remains a relative bright spot. It is one reason why my colleague Rene Circ, Grubb & Ellis’ National Director of Industrial Research, thinks speculative construction of industrial space could bounce back more quickly than commonly expected. Click here to read Rene’s article.
Have a great weekend.
SVP, Chief Economist
Grubb & Ellis
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