ACT Research: Economy and CV Markets Recovering, but Path Forward Will Be Choppy

In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that the impact of more people and politicians taking the threat of the virus more seriously is a choppy economic path forward.

In recognition of the virus’ impact, ACT Research has created an easily accessible COVID-19 MARKET WATCH webpage to track noteworthy high frequency macroeconomic and transportation-specific market indicators, which can be found at https://pages.actresearch.net/covid-19.

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.

“As the virus flared in the weeks following Memorial Day, and exacerbated by the Fourth of July, segments of the economy will be turned off and back on as the authorities work to contain the widening spread of the disease,” said Kenny Vieth, ACT’s President and Senior Analyst. He continued, “While we do not believe state-level closures are likely from here, we note that the raging case counts in major Sunbelt states raise the risk of major supply-chain disruptions, if any of those states are shuttered for several weeks.”

Specifically regarding how the CV industry is doing, Vieth commented, “Even as the economy struggles to regain its footing post-COVID and pre-vaccine, freight markets should be somewhat less impacted.” He elaborated, “While we can choose not to go to restaurants, not eating is not an option, and to that end, we are reminded of Alan Greenspan’s research that freight volumes on a per capita basis change very little over time. Most freight is related to society’s most basic needs: food, shelter, clothes, transportation.”

Vieth further explained, “With the OEMs, and subsequently the supply base, pushing hard to restore material and assembly flows, underlying economics do not appear to be as punitive as initially estimated. Additionally, spot freight rates, sitting at the intersection of equipment supply and freight demand, are the leading indicator of heavy commercial vehicle demand cycles, and the sustained rally in spot rates is one consideration leading us to make the case for a steady Class 8 market into the end of 2020.”

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 63rd seminar is scheduled for August 11–13, 2020, and is being offered via livestream for those wishing to participate. Focused on the road to recovery from the COVID-19 pandemic, the event will feature dealer, alternative power, and economic panels, as well as discussions on near-term demand of North American commercial vehicle markets and the pending impact of alternative power on the market in the near future. Click here for seminar information.

Click here for more information about ACT’s Commercial Vehicle Dealer Digest.

Click here for information about other ACT Research publications and services.