I’ve been listening to corporate conference calls closely for hints about macroeconomic weakness. Railways have great insight into the goods macroeconomy, which has been struggling since the covid boom. Some comments in the conference call yesterday highlight caution on the Canadian economy but there are also comments on the US, where it generates about one third of its revenue.
Tracy Robinson (President and CEO):
- “The macro is lighter than what we expected coming into 2024 and maybe even a bit softer than what we thought on our last call back in July. We’re seeing this play out in our merchandise business, especially in construction and related commodities as well as in automotive.”
- “As we look forward, we see that continuing through next year, so kind of lower and longer.”
Ghislain Houle (Chief Financial Officer):
- “From a macroeconomic perspective, lumber remains at the trough and consumer consumption continues to be tepid.”
- “As we enter the final few months of the year, overall industrial production now looks to be largely flat for 2024.”
Remi Lalonde (Chief Commercial Officer):
- “Business has been a bit more challenging than expected due to the labor uncertainty and lower-than-expected industrial production and manufacturing activity and mixed signals around consumer confidence.”
- “Despite soft consumer confidence in the U.S. and Canada, we’re looking for sequential and year-over-year growth in intermodal”
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