According to ACT Research’s latest State of the Industry: NA Classes 5-8 report, persistent inflation, continued interest rate hikes, and the potential for recession remain overarching themes. Although themes remain the same as last month, the biggest change is in ACT’s declining optimism that inflation can be easily tamed.
“On the bright side, supply-chain disruptions continue to moderate. A modest 2023 recession centered on Q1’23 remains our base case, with a more material freight downturn having already started in Q2’22 and beginning to contract y/y in Q4’22,” said Eric Crawford, vice president and senior analyst, ACT. “With core inflation defying expectations, we take the Fed at its Chairman’s word that the institution will take ‘forceful and rapid steps to moderate demand. Consensus expectations are that the Fed will add another 75bps of rate tightening this week.” Regarding August order activity, he commented, “New order activity remained at modest levels in August, if above recent activity levels, as the OEMs slowly begin to open their 2023 order books. The May-July period is the weakest period of the year for new order activity; for Class 8, weakness typically extends through September.”