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Wednesday, May 29, 2024

Tough Times Coming in 2020 for Heavy Duty Market

COLUMBUS, IN – According to ACT Research’s recently released Transportation Digest, carrier profitability and by extension Class 8 demand are heading toward tougher business conditions in 2020. Succumbing to the slowing economy, forward-looking metrics in the medium duty Classes 5-7 markets were awash in a sea of red ink in October, although moderate growth persists in build expectations.

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 is designed as a quick look into transportation insights for use by fleet and trucking executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the US trailer market, used truck sales information, and an overview of the US macro economy.

“After peak sales and build in 2019, significant declines are ahead in 2020, as heavy duty sales and build follow the net orders trend down. But if our forecast of ongoing (but slower) economic expansion holds in 2020, the drop will be a correction (along the lines of 2015 and 2016), not a devastating recession (as in 2008 and 2009),” said Kenny Vieth, ACT’s President and Senior Analyst.

Regarding the medium duty market, Vieth commented, “Given its traditional status as the strongest medium duty order month of the year, October’s disappointment suggests further softening of customer demand. Following September’s bow shot, the downward trajectory of the seasonally adjusted annual rates in the past two months suggests the slowing of build rates the past two months are looking more like a new paradigm, rather than a pause that refreshes.