ACT Research: Analysts Forecast Slight Increases in Class 8 Retail Sales and Production Volumes in 2023
Class 8 forecasts, as published in the latest release of the North American Commercial Vehicle OUTLOOK, are for slight year-over-year increases in retail sales and production volumes in 2023, reflecting stronger momentum into Q3. ACT continues to forecast deteriorating sales and build in Q4.
“The industry is closing in on this cycle’s downward inflection point as strong vehicle production and sales continue in the face of weak freight creation and the exhaustion of pent-up demand in 2023. Collectively, lower freight rates, shrinking carrier profits, higher equipment and borrowing costs, and improved equipment availability put downward pressure on demand overall,” according to Kenny Vieth, ACT’s President and Senior Analyst.
Vieth added, “Even though we are closing on this cycle’s tipping point for commercial vehicle demand, we are encouraged by the economy’s resilience as evidence that the economy’s chances of dodging a recession accumulate. While the expectation is for tepid growth in the near term, it is an improvement from torpid. The economy’s ongoing above-expectations performance allows us to modify our US forecast, taking an anticipated recession out of our projections for the economy.”
Vieth concluded, “As we look from here to the end of 2023, like a tide-race, there are competing forces at work. On one side of the scale are building downside pressures, the slow economic expansion, weak freight volumes, rising carrier profit pressures, and fading pent-up demand. Those negatives are currently balanced against healthy carrier balance sheets and supportive pent-up demand at the start of 2023, and the likelihood of a CARB-induced prebuy in California into the end of the year. As the force of pent-up demand fades and payback replaces prebuy in 2024, it is worth noting that our expectation for the timing of a downturn in heavy vehicle demand could be a quarter later than our expectations, but it is unlikely to be two quarters later.”
The N.A. CV OUTLOOK reports on the trucking industry forecast, providing a status of commercial vehicle demand, tactical and strategic market analysis and forecasts ranging out five years. The report’s objective is to give OEMs, suppliers, investors, and other interested market participants the information they need to make informed decisions in what is traditionally a deeply cyclical market. The report provides a complete overview of the North American markets, touching on relevant demand drivers starting with forward-looking activity metrics, orders and backlogs. Information included in this report covers build and retail sales forecasts and current market conditions for medium- and heavy-duty trucks/tractors, and trailers, North American macroeconomics by country, freight and carrier market performance, used equipment valuation trends, and regulatory environment analysis and impacts.
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.