In the release of its Commercial Vehicle Dealer Digest, ACT Research noted that the economic picture remains largely unchanged, with growth moderating in 2019 from strong 2018 growth. The economy was already moderating as tailwinds from the end-of-2017 tax cuts diminished, but other caution flags are waving including current trade uncertainties, slowing industrial and auto sectors, tariff-driven inventory building, and an unfolding global economic slowdown. The report provides monthly analysis on transportation trends, equipment markets, and the economy.
“At the heart of ACT’s cycle duration prediction, carrier profitability and production peaks always lag the freight cycle, so fleet capacity always accelerates relative to freight growth at exactly the wrong time,” said Kenny Vieth, ACT’s President and Senior Analyst. He continued, “Since late 2017, ACT’s forecasts have targeted 2019’s third quarter as the point at which the supply of Class 8 tractors and demand for freight services were likely to tip so far as to break the current period of peak vehicle production, as demand reverts to the mean. Current data and anecdotes make a strong case that the call for a Q3 inflection expectation remains intact.”
Vieth added, “Weak freight is not just a trucking story as NA Class 1 rail volumes dropped 2.1% year-over-year in May, after a 0.6% slide in April. Regarding the Class 8 market, current build rates suggest potential upside to the 2019 forecast, but large new inventories and deteriorating freight and rate conditions suggest erring on the side of caution remains the right call.” He concluded, “When the change comes, it is likely to come fast.”
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American 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. More information can be found at www.actresearch.net.
ACT’s 61st seminar is scheduled for August 12-14, 2019, and will feature a dealer panel, as well as discussions on near-term demand of North American commercial vehicle markets and the impacts of tomorrow’s technical challenges. A global forecasting workshop is also being planned in conjunction with this semi-annual event. Click here for seminar information.