ACT Research: Despite Current Economic Activity, 2023 Decline Yet to Come
In the release of its Commercial Vehicle Dealer Digest, ACT Research reported a slightly raised 2022 GDP forecast despite current economic activity, but analysts continue to expect a decline in 2023.
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.
According to Kenny Vieth, ACT’s President and Senior Analyst, the Federal Reserve will continue to aggressively raise interest rates so long as inflation remains elevated. He added, “Not only has the Fed telegraphed this aggressive stance, but economic data suggest the Fed has little choice. It is our view the Fed will continue on its course of tighter monetary policy as still deep-pocketed consumers and businesses drive demand for labor in structurally constrained labor markets.”
Factors mitigating a sharper commercial vehicle market downturn in 2023 include pent-up demand and the potential for some prebuying. Vieth added, “As we have long argued, carrier profits are the critical element in vehicle demand. Profits in 2023 are anticipated to be lower, but even modeling a sharp downturn — the worst since 2007 — truckload (TL) net margins are projected to be the fourth best on record.”
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.
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