ACT Research: Downside Risks Dampening Expectations for Heavy-Duty CV Market

According to ACT’s latest release of the North American Commercial Vehicle OUTLOOK, while ACT Research still likes the footing of the US economy, with consumers sitting on considerable savings, debt-service historically low, and the job market flush with opportunity, downside risks are dampening near-term commercial vehicle expectations.

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.

“Given the corrosive effects of inflation and the Fed's response, uncertainty as to the depth and duration of events in Ukraine, and the impact of Chinese COVID lockdowns on global supply chains, the economy is walking a fine line in 2022.”  - Kenny ViethAccording to Kenny Vieth, ACT’s President and Senior Analyst, “Given the corrosive effects of inflation and the Fed's response, uncertainty as to the depth and duration of events in Ukraine, and the impact of Chinese COVID lockdowns on global supply chains, the economy is walking a fine line in 2022.” He continued, “Trucking industry profits tend to lag the freight cycle, so are likely to peak around Q3’22. As profits lag relative to the cycle, so too does production for heavy-duty trucks and trailers.”

Vieth concluded, “The headline takeaway is that we have lowered our 2023 Class 8 build forecast. Our tempered view reflects: 1) a longer tail to supply-chain headwinds than we had previously envisioned, particularly for semiconductors, and 2) lower in-house GDP and Freight Composite estimates.”

Vieth noted, “Despite the lowered build forecast in the most recent issue of our North American CV OUTLOOK, it is important to remember that we continue to expect higher build, just not as high as previously thought. Carrier profitability is robust, and should there be a recession, we anticipate that it will be shallow and short-lived, and pent-up demand for medium- and heavy-duty vehicles still remains.”

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 Research recently completed POWER UP, a look at 7 global regions and more than 20 countries in a review of local regulations, infrastructure, and the impact on the adoption of battery and fuel cell electric commercial vehicles through 2040. This forecast is the first of its kind, a review of the decarbonization of commercial vehicles around the world. POWER UP is available now at https://www.actresearch.net/power-up/.

Additionally, ACT Research published an update to CHARGING FORWARD, a North American-centric battery and fuel cell electric vehicle adoption rate forecast, covering 23 vehicle applications, in Classes 4-8 commercial vehicles, through 2040. CHARGING FORWARD is considered by many industry leaders to be the apex of analysis and economic-based total cost of ownership modeling in the industry. And, it is now available for purchase at https://www.actresearch.net/electric-vehicles-charge/.

ACV Image for 5-26-22Currently, the team at ACT Research is engaged in a commercial autonomous vehicle multi-client study. Through this work, we have identified adoption rates and forecast for autonomous Classes 4-8 vehicles through 2040. On Thursday, May 26, ACT’s autonomous team will hold a virtual briefing and update about the study’s progress to date. More information about our Autonomous Commercial Vehicle Study and the upcoming briefing can be found here: https://www.actresearch.net/autonomous-cv/.

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