As published in the latest release of the North American Commercial Vehicle OUTLOOK, expectations for Class 8 and trailers are lowered as the recovery in freight markets remains elusive.
“Within the broader Class 8 and trailer markets, US Class 8 tractors and van trailers bore the brunt of the markdowns as freight metrics have failed to gain traction,” according to Kenny Vieth, ACT’s President and Senior Analyst. “Less money in carriers’ pockets and lower industry build rates in 2024 also push down on 2025 and, to a lesser extent, 2026.”
Manufacturing readers especially can appreciate how difficult it has been to attract labor the past two-plus years. If circumstance forces the industry to materially cut production in 2024, thereby having to shed labor, supply-chain integrity could be compromised.
Vieth added, “If layoffs do come to pass, it will be difficult for the industry to scale rapidly in 2025 and 2026 when US and Canadian truckers and dealers will want all the equipment the industry can build. ACT’s research suggests that between prices, taxes, and other affiliated costs, MD and HD vehicle costs will rise by between 12% and 14% as the EPA’s Clean Trucks regulation goes live in 2027. As such, we believe the OEMs will be at least partially successful in convincing customers to begin EPA’27 prebuying in 2024. Starting prebuying earlier should help moderate runaway demand into 2026, but risks prolonging the freight cycle downturn.”
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.
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.