According to the North American Commercial Vehicle Outlook from ACT Research, a fundamentally weak U.S. tractor market is projected for 2024. Factors leading to this include ongoing pent-up vocational truck demand, strong tractor demand in Mexico, and labor hoarding.
“Just as specialty trailer demand remains strong, the U.S. economy is likewise tilted to benefit specialty trucks,” said Kenny Vieth, ACT’s president and senior analyst. “Presently, the longest Class 8 backlogs are for U.S. and Canadian vocational trucks. Like vocational market demand, Mexico’s Class 8 tractor backlog-to-build cushion is more than double that of the U.S. or Canadian tractor markets.”
Vieth added that while there is optimism for the specialty vehicle markets and Mexican truckers to offer assistance until 2024, the domestic tractor market doesn’t appear as promising. In terms of carrier earnings, during the second quarter, the top carriers in ACT’s database experienced a significant decline in income.
With spot freight rates remaining relatively low and contract rates facing ongoing pressure, the outlook for carrier profits suggests a period of continued weakness until incomes start to recover in the second quarter of 2024, according to ACT Research. If projection of increased profits extending into late 2024 holds true, there is potential for support to extend into 2025, ACT said.
