FREE SUBSCRIPTION Includes: The Advisor Daily eBlast + Exclusive Content + Professional Network Membership: JOIN NOW LOGIN
Skip Navigation LinksHome / News / Read News


ACT Research: Heavy Duty Market Up-Cycle Running Out of Steam

October 14, 2019, 07:20 AM
Filed Under: Trucking

Since early 2018, ACT Research’s forecasts have called for the up-cycle in the Class 8 market to run out of steam around the third quarter of 2019, according to ACT’s latest release of the North American Commercial Vehicle OUTLOOK.

“Over the past couple of quarters, we have been beating the drum loudly so that our customers could be as well-positioned as possible for when the downturn in industry activity inevitably occurred,” said Kenny Vieth, ACT’s President and Senior Analyst. “Starting around six weeks ago, we began to see announcements of staffing reductions and plant shutdowns from OEMs, as well as from major tier-one suppliers. Anecdotes suggest the lower tiers on the supply chain have experienced production volumes cuts since early in September.”

Regarding heavy vehicle demand, Vieth noted, “Two metrics of note this month were the continued pulldown of the Class 8 backlogs, owing to ongoing order weakness, and a fourth consecutive month of record new truck inventories.”

He added, “From a net freight perspective (freight less productivity), growth falls from 4 percent in 2018 to 0.2 percent in 2019, as productivity has risen with a vengeance in response to the sharp run-up in freight rates in 2018.”

Regarding ACT’s medium duty forecasts, Vieth said, “In the near term (2019), there remains a bit of upward pressure on production, though it started abating in July. Based on the accumulation of inventory, we expect further slowing in medium duty build as the year progresses, a sentiment echoed by recent OEM layoff and production curtailment announcements.”

The N.A. CV OUTLOOK forecasts the future of the commercial vehicle industry, looking at the next one to five years, with the objective of giving OEMs, Tier 1 and Tier 2 suppliers, and the investment community the information they need for planning in a deeply cyclical industry.

Comments From Our Members

You must be an Equipment Finance Advisor member to post comments. Login or Join Now.