Editor’s Pick: Why GDP Growth Is Not the Best Indicator of Freight Demand
Note: Today’s post is part of our “Editor’s Pick” series where we highlight posts published by our sponsors that provide practical knowledge and advice on timely and important supply chain and logistics topics. In this January 31, 2023 post from Uber Freight’s blog, Mazen Danaf, Senior Economist at Uber Freight, outlines why GDP is not the best gauge of freight demand.
The US economy grew at a robust annual rate of 2.9% in the last quarter. However, the strength of the overall economy does not necessarily mean that trucks were busier. The last quarter saw a sharp decline in housing activity. Residential private investment plummeted by 27% on an annual basis, according to the GDP report. In addition, this report had other hidden signs pointing to weaker freight demand.
There are various factors that contribute to GDP. These are generally categorized into (1) personal consumption of goods and services, (2) net exports, (3) private domestic investment, and (4) government purchases. While some of these factors contributed positively to GDP growth in Q4, their implications on freight demand were gloomy.
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