ACT Research: 2021 CV Markets Were Strong on Demand, but Constrained by Supply Chains
In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that supply-chain constraints kept a lid on the industry’s ability to raise build rates through 2021, at least until December when a torrent of red-tagged/incomplete heavy-duty, and to a lesser extent medium-duty, units were finished.
The report, which combines ACT’s proprietary data analysis from a wide variety of industry sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report includes a relevant but high-level forecast summary, complete with transportation insights for use by commercial vehicle dealer executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the total US trailer market, used truck sales information, and a review of the US macro economy.
Kenny Vieth, ACT’s President and Senior Analyst, noted, “As supply constraints continue to dominate the conversation, broad-based economic and freight market strength is often overlooked. In addition to long lead-time manufacturing demand, US consumers’ economic footprint has never been bigger.” He elaborated, “GDP surged 5.7% in 2021, with the forecast for growth at 3.7% in 2022, and thanks to the long period of low interest rates, consumer debt service levels are at historically low levels, while household net worth has surged since the beginning of 2020.”
About effects on the transportation industry, he commented, “For transportation providers, the virus continues to bend consumer spending to goods and away from services. Significant congestion in ports on both coasts is expected to linger into mid-year, and pent-up demand in the manufacturing sector is growing, related to the same supply-chain woes that are impacting commercial vehicle production. Additionally, corporate profits continue their record-setting run, allowing businesses to invest in productivity enhancing equipment. With wages growing rapidly, machinery demand is well-above trend, as employers drive capital for labor substitution.” Vieth added, “Even discounting for unprecedentedly low automotive inventories, consumer-facing retail inventory-to-sales ratios remain unprecedentedly low, which will support freight demand deep into 2022. Additionally, used vehicle prices are at record levels across Class 8 age and mileage nodes, and data indicate record valuations for medium-duty and trailer assets.”
He concluded, “Healthy consumer and corporate balance sheets and pent-up inventory demand translate into continued robust freight markets and still-rising freight rates (to date).”
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 66th Seminar is scheduled for February 22–24, 2022. Focused on the continuous evolution and advancement of autonomous and powertrain technologies in the transportation and commercial vehicle markets, OUTLOOK Seminar 66 will feature key industry leaders from Ford, Transplace, TuSimple, and the EPA, with more being added to the agenda. February’s event features three panels (US Economics, Trucker & Transportation, and Autonomous Ecosystem), as well as a fireside chat with the EPA, discussions about fleet decarbonization, electric vehicle forecasts, and reviews of freight/transportation, Class 8, Classes 5–7, the US used truck and new US trailer markets. For information about OUTLOOK Seminar 66, click here. https://www.actresearch.net/seminar66/
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 now 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/.
Currently, the team at ACT Research is engaged in a commercial autonomous vehicle multi-client study. Through this work, we will identify adoption rates and forecast autonomous Classes 4–8 vehicles through 2040. If you’re working to understand the economic value proposition or the unit economics of different autonomous models, participation in this study is a must. Learn more at https://www.actresearch.net/autonomous-cv/
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