ACT Research: Factors Signal a Fundamentally Weaker US Tractor Market in 2024
As published in the latest release of the North American Commercial Vehicle OUTLOOK, ACT Research believes that “it’s different this time” factors are at work in 2024, and those factors will help support a fundamentally weak US tractor market.
Those factors include ongoing pent-up vocational truck demand, strong tractor demand in Mexico, and labor hoarding.
“Just as specialty trailer demand remains strong, the US economy is likewise tilted to benefit specialty trucks. Presently, the longest Class 8 backlogs are for US and Canadian vocational trucks. Like vocational market demand, Mexico’s Class 8 tractor backlog-to-build cushion is more than double that of the US or Canadian tractor markets,” according to Kenny Vieth, ACT’s President and Senior Analyst.
While specialty vehicle markets and Mexican truckers are expected to provide support into 2024, domestic tractor market fundamentals are less bullish. Regarding carrier profits, Vieth added, “The all-star team of carriers that make up ACT’s carrier database saw Q2 incomes plummet. With spot freight rates still soft and contract rates remaining under pressure, the forecast for carrier profits is continued weakness before incomes begin to expand again in Q2’24. If our forecast for higher profits into the end of 2024 is correct, support into 2025 is on the horizon.”
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.