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Industry & Market Analysis
Key External Drivers
Total retail sales
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Many industry operators transport goods for clients in the retail sector, which is one of the primary sources of industry revenue. Consequently, a climb in retail sales leads to stronger demand for industry services. Total retail sales are expected to decrease in 2020, posing a potential threat to the industry.
Total trade value
Trade accounts for a significant portion of Canada's economy, with most traded goods being transported by trucks. As a result, trade levels are strongly correlated with this industry's performance. An increase in the total value of trade indicates that more goods are being transported to and from Canada, resulting in greater demand for industry services.
Total trade value is expected to decrease in 2020.
Industrial capacity utilization
Industrial capacity utilization measures the proportion of actual industrial output to potential output. Since the longdistance freight trucking industry in Canada plays a vital role in the transportation of manufactured goods and inputs, the industry is heavily reliant on manufacturing activity. A decreasing utilization rate typically indicates that demand for manufactured goods is declining, thereby decreasing demand for freight trucking. Industrial capacity utilization is expected to decrease in 2020.
External competition for the truck transportation sector
Industry operators experience significant competition from other transportation industries. For example, ocean, air and rail transportation all compete with industry operators for demand from downstream clients. When the price of fuel increases, customers will generally switch to more fuel-efficient methods of transportation. External competition for the truck transportation sector is expected to decline alongside the industry in 2020, representing a potential opportunity for the industry.
