In today’s Finshots, we tell you what trucks can tell you about the economy.

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The Story

When economists gauge the health of an economy, they rely on complex indicators. They look at GDP (Gross Domestic Product) to measure the value of goods and services produced over a period. Inflation tells them how much more is paid for the same goods compared to a previous year. And when assessing investments, they see how rising or falling interest rates impact deposits, loans and investments.

But these indicators also come with a few problems. For one, they are often backward-looking, meaning they only tell us what has already happened. So, they’re what you call “lagging indicators”. And they can also be complicated for anyone who isn’t well-versed with economic jargon.

But what if we told you that there was a simpler way? What if you could skip the jargon and simply look at… trucks?

Yup! Economists may not tell you this, but trucks can reveal a lot about economic activity. Simply put, when truck sales and rentals are high, it usually means that businesses are gearing up for higher demand. Goods are moving, production is ramping up and logistics are in full swing.  And with increased demand for logistics, truck rentals rise. On the flip side, when rentals drop, it’s often a sign that business is sluggish.

Take right now, for instance.

Truck rentals are climbing. In December 2024, hiring a truck from Delhi to major cities like Mumbai, Chennai, Kolkata or Hyderabad and back cost around ₹1,78,000 on average. In January 2025, that figure rose by 3% to ₹1,83,000.

So what does that tell us?

For starters, it signals that consumer goods are moving faster. 

The ongoing Maha Kumbh alone has driven five times more trucking activity than in 2013. FMCG giants like Dettol, Dabur, PepsiCo and Coca-Cola see a massive marketing opportunity and are flooding the event with product samples. And with distributors in the region already reporting anywhere from a 2x to 10x jump in business, truckers have every reason to keep their rates up.

Then, rising rentals also reflect that agricultural activity is looking strong. 

In places like Kolkata, there was a seasonal uptick in the transportation of winter vegetables and fruits. And while that may be a one-off event, truck rentals have been rising for two other key agriculture-related reasons. First, the higher production of kharif crops, you know, those grown during the monsoon and harvested from October onwards. For context, rice production (a kharif crop) hit a decade high of 120 million tonnes last season. And although kharif pulses saw a decline, overall kharif foodgrain output was still up by about 40% over the previous year. The second reason is rabi crop sowing. We’re talking about wheat and certain oilseeds grown in winter (between October and December) and harvested in summer. There has been a rise in sowing these crops as well. The total area under pulses like chickpeas, lentils and urad dal has reached over 14 lakh hectares, slightly higher than last year.

So again, rising rentals = rising agricultural activity.

And lastly, trucks also offer insights into manufacturing and infrastructure trends.

Take logistics businesses which are highly sensitive to fuel prices. If truck rentals rise because of expensive fuel, it suggests that businesses are willing to absorb those costs because demand is strong. And that also means healthy manufacturing on the horizon. But if rentals stagnate or drop despite a fuel prices rise, it could indicate that businesses are struggling to pass on higher costs to customers or absorb them. That’s often a red flag as it points to weaker consumer demand which in turn could be a reflection of rising food inflation, expensive loans or even sluggish wage growth.

So yeah, truck rentals can be a good way to look at the economy. 

Plus, they can be a great way to forecast the upcoming economic changes to an extent. That’s because they react quickly to market conditions. Unlike GDP or unemployment data, which are reported after a certain period (or as we saw, lagging indicators), truck rental prices fluctuate as per the market rate that’s based on the ongoing supply and demand trend. And this makes them an early warning sign of economic shifts or what we call ‘leading indicators’. They tell us where things might be moving instead of making sense of what has already happened.

So Finshots, are you saying that we should just keep tracking trucks instead of the long economic formulas that are used to study the economy?

Not exactly. Because truck rentals and sales could also send confusing signals at times.

Take 2018, for instance, when truck sales soared and quarterly sales for most truck manufacturers rose by as high as 40% year-on-year. But at the same time, truck rentals kept falling after the festive season. So someone tracking truck sales might have assumed booming economic activity. But falling rentals told a different story that freight and demand was actually weak.

But the actual reason that sales were rising was because manufacturers were offering heavy discounts on them. And this was done to clear the inventory before a policy change. And rentals were declining not because of slump in any economic activity but because of policy shifts such as the goods and services tax (GST) roll out.

And this is not a one off event. These discrepancies keep showing up every now and then. Just last month, heavy duty truck sales fell even as truck loading capacity increased.

Rentals can also be highly sensitive to sudden changes in government policies or economic disruptions, making them volatile indicators.

But that, folks, is how changes in trucks and their rents could tell you a bit about what’s brewing in the economy.

And while high-end economic indicators get all the attention, sometimes all you need to do is watch the roads. An empty truck, an idle fleet or a spike in demand — they all might have a story to tell about the economy.

Until then…

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