According to ACT’s latest release of the North American Commercial Vehicle OUTLOOK, while ACT Research still believes a soft landing is the US economy’s most likely path, the potential for a mild recession is becoming an increasingly compelling alternative.
“We find ourselves in a turbulent environment, where still significant positive and increasingly negative economic forces are crashing into one another,” according to Kenny Vieth, president and senior analyst, ACT Research. “With inflationary shocks emanating from Ukraine, the Fed’s task of engineering a soft landing has become increasingly challenging.
“We believe downward pressures are building, and the probability of recession continues to grow. We think the probability of a mild recession is now nearly as likely as that of our base-case scenario.”
The N.A. CV OUTLOOK is a report that forecasts the future of the industry, looking at the next one to five years, with the objective of giving OEMs, Tier 1 and Tier 2 suppliers, and investment firms the information needed to plan accordingly for what is to come. The report provides a complete overview of the North American markets, as well as takes a deep dive into relevant, current market activity to highlight orders, production, and backlogs, shedding light on the forecast. Information included in this report covers forecasts and current market conditions for medium and heavy-duty trucks/tractors, and trailers, the macroeconomies of the US, Canada, and Mexico, publicly-traded carrier information, oil and fuel price impacts, freight and intermodal considerations, and regulatory environment impacts.
“With the current head of steam that includes healthy consumer and business balance sheets, strong employment demand, and pent-up manufacturing sector activity, this inflation driven economic slowdown is on one hand somewhat unique. On the other, traditional recession predictors are in play: Fed rate hikes, high energy prices, negative exogenous events and falling equity valuations come to mind,” Vieth noted. “We believe the odds of a recession materializing, in some form or fashion, are essentially 50/50 relative to our slowing top line growth into a modest freight recession base case.”
