ACT Research: 2022 NA CV Forecasts Slightly Raised, Economic Activity Favorable (For Now)

According to ACT’s latest release of the North American Commercial Vehicle OUTLOOK, 2022 forecasts this month are slightly raised from October thanks to easing supply-chain constraints. Current economic activity aside, as long as inflation remains elevated, the Fed will continue its aggressive response, increasing the chance of a sharper decline in economic activity. Looking to 2023, Class 8 forecasts are unchanged, while Classes 5-7 reflect more of a pull forward in demand.

The N.A. CV OUTLOOK is a robust report that forecasts the future of the industry, looking at the next 1-5 years, with the objective of giving OEMs, Tier 1 and Tier 2 suppliers, and investment firms the information needed to plan accordingly for what is to come. The report provides a complete overview of the North American markets, as well as takes a deep dive into relevant, current market activity to highlight orders, production, and backlogs, shedding light on the forecast. Information included in this report covers forecasts and current market conditions for medium and heavy-duty trucks/tractors, and trailers, the macroeconomies of the US, Canada, and Mexico, publicly-traded carrier information, oil and fuel price impacts, freight and intermodal considerations, and regulatory environment impacts.

Kenny Vieth_S67 (7)According to Kenny Vieth, ACT’s President and Senior Analyst, “Our 2023 forecasts belie current economic activity. Using Class 8 as an example, record orders in September followed by robust preliminary orders in October, large backlogs, a string of record-low cancellation months, and easing supply-chain constraints, all point to continued strength into 2023….” He added, “In all things financial and economic, the maxim to adhere to is ‘Don’t fight the Fed.’ The longer inflation remains elevated, the more aggressively the Fed will respond with higher interest rates. This, in turn, increases the chances of a sharper decline in economic activity, and 1) results in fewer commercial vehicles required to facilitate this lower level of activity, and 2) will likely exacerbate downward pressure on spot and contract rates, adversely impacting carrier profitability.”

“ACT is not yet willing to chase volumes all the way up the ladder in 2023,” Vieth concluded. “The critical factor in forecasting 2023 is when do lower freight volumes and higher borrowing costs compress carrier profits sufficiently to kill the cycle? Our current thinking is the negatives begin to weigh on orders as soon as 1H’23 and more meaningfully by the second half of 2023; however, with prebuying ahead of the California Air Resources Board (CARB) mandates that start in 2024 and considering carrier profitability strength, there is a compelling case to be made for production volumes to be sustained at 2022 levels through the end of 2023.”

ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.

ACT’s 68th Seminar is scheduled for February 21-23, 2023. Look for more details on this event over the coming months and save the date for February’s event. When details are available, they may be found at www.actresearch.net.

With numerous technology applications and a current lack of mass adoption, the path to understanding the autonomous technology horizon is quality economic modeling. ACT Research, the gold standard in market data, forecasting, and total-cost-of-ownership development for the commercial vehicle market, has developed DRIVING AUTOMATION, a report aggregating relevant market information, diving deep into autonomous models, and presenting a technology adoption rate forecast over a 20-year horizon. To learn more about DRIVING AUTOMATION, click HERE.

For businesses working to understand the future of decarbonized powertrains across Classes 4-8 commercial vehicles, ACT Research is continuing to develop and report groundbreaking analyses of various propulsion systems' evolution of battery electric, fuel cell electric, diesel, gasoline, natural gas and hydrogen internal combustion, as well as key considerations of government regulations and subsidies, electric, hydrogen, natural gas, and diesel/gasoline supply, and infrastructure as well as a TCO model of 50 unique vehicle applications across North America, Europe, and China through 2040. To join ACT Research in this effort as we work to develop our third edition of CHARGING FORWARD, a decarbonization forecast thru 2040, and to learn more, click HERE.

 

For more information about ACT’s NA Commercial Vehicle OUTLOOK, click here.

Details about other ACT Research products and services can be found by clicking here.

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