In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that its analysts have updated their forecast scenarios to include a recession in 2023.
“We have revised our economic forecasts and are now modeling a recession in the first half of 2023, although flat (0.0%) for full-year 2023,” said Kenny Vieth, president and senior analyst, ACT Research. “Regarding Class 8, there are some moving pieces, with a higher 2022 forecast and lower expectations for 2023 and 2024. And while the medium-duty market’s diversity has helped insulate it from the volatility of the freight markets to some degree, its inability to gain traction, coupled with mounting recession pressures, necessitated another reduction in the production and sales forecasts.
“Similar to our Class 8 changes, we slightly raised the 2022 US trailer forecast, but lowered 2023 and 2024 expectations to reflect a likely recession.”
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.
Additionally, Vieth noted factors that ACT anticipates will mitigate a more severe downturn.
“Carrier profitability is strong and ongoing pent-up demand continues, albeit less so as economic expectations are eroded,” he said. “Carrier profits were at all-time record levels in 2021, and TL fleet contract rates will still rise high single digits this year. Profitability tends to lag the freight cycle, so our modeling anticipates carrier margins, that have been above 2021 levels through the first half of this year, will be near record level when the 2022 accounting is complete. As we have long argued, carrier profits are the critical element in vehicle demand.”
