The Pallet As An Economic Indicator

The lowly pallet was first developed in ancient Mesopotamia, as products were moved on a skid-like device. The real development of pallets occurred in the 1930s, as forklifts were first introduced into the workplace. While we think of pallets in the traditional form (wood), variations of plastic and steel have also found a foothold.

But pallets are also an indicator of economic growth. With a lifespan of only 3-5 years, the demand for wood pallets increases in a booming economy.

A recent conversation with a local wood processor offered a view into the pallet marketplace and the economy. Per the processor, the demand for wood used in pallets is “through the roof”. “It’s never been stronger”.

Those comments caused us to look at another non-traditional economic indicator of US economic health…..flatbed trailers.

Unlike traditional box trailers, flatbed trailers are used to transport oversized and unique products. From new manufacturing equipment to blades for wind generators, the flatbed trailer is in demand when the economy is hot.

The above chart shows the demand for flatbed transportation against the number of trucks available. In the month of April, the demand exceeded supply. In fact, looking back historically, the flatbed demand hasn’t been this strong in a long, long time.

So, while the prognosticators debate the future of interest rates and the stock market, it’s fun to keep an eye on other economic indicators that are as common as a pallet.