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Market fall bottoms out
Page 29
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THERE are signs that the drop in general haulage work may have bottomed out—but it is going to be the end of the year before any modest recovery can be expected.
This is the good news, bad news, forecast made by the economic adviser to a leading British freight transport company.
According to the economist's report the transport market as a whole will stay slack throughout 1976 with total demand only slightly higher than last year.
The modest recovery expected later in the year is "more likely to be reflected in a reduction in the industry's over-capacity than in a hardening and improving profit margins."
Inflationary pressures on costs are expected to ease during the next 12 months and there will be a marked slowdown in vehicle price rises. The availability of discounts should also increase.
But the report warns that there is no room for complacency. On average costs are still likely to be 12-15 per cent higher than In 1975 and rigorous cost control would be "vitally important".
Looking at the individual sectors of the business the report says that in general haulage the decline may now have bottomed out as manufacturing output is now picking up.
However, it could be several months before there is any firm evidence of a recovery in demand.
Contract hire will continue to be a market with "considerable potential" and tank haulage could also look forward to better times.
But for heavy haulage it is gloom all the way. Investment in plant and machinery is likely to decline and demand would remain slack and recovery could not be expected till 1977.