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This story appears in the May 30 print edition of Transport Topics.

Truck tonnage rose 2% year-over-year in April, continuing an upward plod that has been suppressed by scant economic growth and the continued inventory bloat, American Trucking Associations reported last week.

Sequentially, the federation’s advanced seasonally adjusted for-hire index fell 2.1% to 134.8.

Likewise, its index of freight actually hauled followed a similar pattern, rising 1.8% to 135.1 in April year-over-year and declining 5% from March.

With the exception of a February spike due to winter weather and seasonal adjustment factors, ATA’s seasonally adjusted index has gained 2.2% or less year-over-year in every month since July. Over a shorter period, beginning with December, the index sequentially has risen a total of 0.1 percentage point.

“Freight remained soft in April,” ATA Chief Economist Bob Costello said. “There is still an inventory correction transpiring throughout the supply chain. For trucking, the overriding factor at this time is the inventory issue, which is likely to continue through the third quarter. Once that subsides, volumes can accelerate.”

Inventory, which has concerned Costello and other economists for the past year, continued to swell in the latest Census Bureau report May 13, spiking to a seven-year high.

Balanced against that weight was a bit of encouragement.

“There are some good signals in the economy, like consumer spending, that are improving,” Costello said. “Retail sales have been good. We got a better- than-expected factory output number in April. Housing remains good. These are all going to help tonnage going forward.”

The positive indicators included 1.3% higher retail sales, a 16.6% jump in new home sales to an eight-year high and a 0.5% rise in factory orders.

Economist James Meil, principal and industry analyst for consultant ACT Research, agreed with Costello.

“The sectors that are doing better continue to do better,” Meil said, such as autos and housing.

However, negative pressure from the inventory overhang goes on, and there still are issues with manufacturing and exports due to the strong dollar.

Meil lamented that economists’ previous expectations about inventories were wrong. One error was the idea that consumers would spend savings from lower fuel prices on goods such as clothing and home electronics. Instead, they bought new vehicles and housing.

The next theory was that holiday sales would lower inventory. Instead, it’s been rising since then.

Meil said there may not be a significant economic pickup before the end of 2016.

“All the signs are indicating this is going to be a flattish year,” Meil said.

He believes that factors such as a modest improvement in Europe’s economy and a gradual adjustment to lower energy prices could take hold by the end of the year. Another factor that will affect this year’s freight environment, he said, was the presidential election that is creating uncertainty among businesses.

“The good news is that nothing is falling apart in the economy,” Meil said. “It’s not terrible, but it is not terribly good, either, and there is no apparent catalyst for change.”

Mark Montague, an analyst at load board operator DAT Solutions, identified some positives, telling Transport Topics that May freight volume exceeded April and is moving at seasonal levels.

“It looks like June could provide another uptick,” he said, driven by consistently strong refrigerated freight and more consistent flatbed activity from basic industries such as lumber.

Like the economists, Montague detected some hopeful economic signs, particularly from the aircraft and automotive industries. The recent rise in crude prices also has helped the long-dormant energy exploration sector, where partially finished wells now are being completed.

Other positive indicators are higher moves of import freight in truck markets such as Los Angeles.

A stronger produce-shipping season from California, hampered in recent years by drought, also will help, he added.

However, Northern states’ freight has been hampered by bad spring weather, Montague said.

Anecdotal reports reinforced the mixed picture.

Benjamin Hartford at Robert W. Baird & Co. also noted that May truck freight levels at least were consistent with seasonal patterns and expectations were favorable.

“Carriers with whom we speak remain optimistic for the remainder of [the second quarter],” he said, despite the high inventory levels.

Jason Seidl, an analyst at Cowen and Co. said in a report, “Carriers we spoke with noted a trucking market that continues to be extremely challenging, with one carrier putting it very bluntly that ‘things suck.’ ”

His comments, based on a visit to the Arkansas Trucking Association meeting earlier this month, linked carriers’ yearning for improved rates and freight levels to an expected drop-off in capacity late next year when the federal electronic logging device mandate pulls noncompliant fleets off the highways.