NEW YORK --- If you're looking for signs of economic recovery, try counting trucks on the road.
Trucks carry almost all the manufactured and retail goods in the country -- from refrigerators to lumber, detergents to toys.
Many economists gauge how fast assembly lines are running, and how much consumers are buying, by the volume of goods hauled by trucks. But the most recent earnings reports show trucks are not carrying enough yet to indicate recovery is near.
Slow consumer spending and stalled manufacturing activity took its toll on truckers in the first three months of the year.
Nearly all major trucking companies reported lower first-quarter revenue and falling profits as the recession continued and shipping demand slid. Many cut back their fleets because of soft demand. Werner Enterprises Inc., for example, said it trimmed an additional 4 percent of its fleet of over 8,000 trucks in the first quarter. Many companies said more cuts will come.
In the first quarter of 2009, about 480 trucking companies went under. That's less than 1 percent of the nation's total freight capacity, which still leaves too many trucks competing for fewer shipments, according to analyst Donald Broughton, of investment bank Avondale Partners. More than 3,000 trucking companies went out of business last year -- taking seven of every 100 trucks off the road.
Mr. Broughton said that more trucking companies will inevitably fail if the economy remains weak. But the pace of closures needs to speed up, he said, to allow other trucking companies to get a bigger slice of shipments and to raise prices again.
Analysts think that the number of trucks on U.S. highways will continue to slide until supply is more aligned with demand. When the trucking business starts to pick up again, they say, other economic factors -- from the employment rate to the gross domestic product -- will eventually follow.
Tavio Headley, an economist with the American Trucking Associations, believes that trucking industry business will pick up as early as next quarter, and the broader economy will show some minor improvements beginning in the last three months of the year.
That is slightly earlier than previous estimates by the trucking association, but Mr. Headley emphasizes that the economy will probably stay weak for some time.
"We do expect the economy to continue to contract, but at a slower pace over the next few quarters," he said.
"And the reason we're not optimistic? A huge reduction in business investment and the housing market continues to be a huge drag on the overall economy."
Some data might indicate the nation's economic tailspin is beginning to level off.
The Institute for Supply Management, a trade group of purchasing executives, said earlier this month that manufacturing activity contracted at a slower-than-expected pace in April, as new orders to factories rose.
Less encouraging, the government also said that the nation's gross domestic product contracted at an annual rate of 6.1 percent during the first three months of the year.
The GDP numbers also showed a rise in consumer spending and a decline in inventories, which suggests manufacturers and retailers might have to increase new orders soon.
"Soon" doesn't seem soon enough for the trucking industry, which is anxiously waiting for calls from manufacturers and retailers who need deliveries. Mr. Headley said that although inventories are falling, sales are dropping at an even steeper rate, which is wiping out any benefit for the trucking industry.
Trucking companies usually see shipments increase in number and weight three months to a year before the broader economy picks up, as retailers restock and manufacturers ramp up.
In the recession in 2001, freight shipments improved a full year before the broader economy.
But there is no sign of that yet in this recession.
The trucking association said shipments fell 4.5 percent in March, erasing gains that made the industry cautiously optimistic in the two previous months.
Shipment volume has already fallen more in this downturn than it did in the recession of 2001, Mr. Headley said.
He said a number of factors can influence how much time will pass between sustained shipping improvement and a stronger economy. For one thing, how fast retailers go through existing inventories will affect how quickly new orders begin.
Lower fuel prices are not necessarily helping the trucking industry either.
Less costly fuel has made it easier for struggling companies to stay afloat -- good for them, but bad for the industry overall because competition remains fierce. So truckers must cut their prices to hold on to business.
Diesel prices are less than half what they were in July, when they shot up to around $5 a gallon.
The national average for on-highway diesel is now about $2.19 a gallon, according to the Energy Information Administration.
"It doesn't matter what fuel costs are if you're not moving your truck to fill it with something," said Chuck Clowdis, an analyst for private forecasting firm IHS Global Insight.
Mr. Clowdis said another reason that trucking companies are hurting now is because they weren't able to raise rates during the rapid fuel price rise last year, as surcharges -- the fees truckers charge to shippers based on fuel costs -- shot up.
Those fuel surcharges helped offset millions spent on filling tanks. Now the surcharges are gone, though, and truckers, forced to keep rates low, are bleeding money, Mr. Clowdis said.
Truckers have financing troubles as well, Mr. Clowdis said. Banks are still reluctant to hand out big loans to companies that might be hard-pressed to repay debt, so some truckers find it hard to secure credit lines to buy property or equipment.
"It's a tough business to run, although some have been able to adjust," Mr. Clowdis said.
"Every carrier has had layoffs. Even the carriers with low debt are going to find it hard to make it through."