COLUMBUS, Ind. – In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that supply-chain constraints kept a lid on the industry’s ability to raise build rates through 2021, at least until December when a torrent of red-tagged/incomplete heavy-duty, and to a lesser extent medium-duty, units were finished.
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.
“As supply constraints continue to dominate the conversation, broad-based economic and freight market strength is often overlooked,” Kenny Vieth, ACT’s president and senior analyst, said. “In addition to long lead-time manufacturing demand, US consumers’ economic footprint has never been bigger. GDP surged 5.7% in 2021, with the forecast for growth at 3.7% in 2022, and thanks to the long period of low interest rates, consumer debt service levels are at historically low levels, while household net worth has surged since the beginning of 2020.”
Vieth said the virus continues to bend consumer spending to goods and away from services.
“Significant congestion in ports on both coasts is expected to linger into mid-year, and pent-up demand in the manufacturing sector is growing, related to the same supply-chain woes that are impacting commercial vehicle production,” Vieth said. “Additionally, corporate profits continue their record-setting run, allowing businesses to invest in productivity enhancing equipment. With wages growing rapidly, machinery demand is well-above trend, as employers drive capital for labor substitution.”
Vieth said even discounting for unprecedentedly low automotive inventories and consumer-facing retail inventory-to-sales ratios remain unprecedentedly low. He said this will support freight demand deep into 2022.
“Additionally, used vehicle prices are at record levels across Class 8 age and mileage nodes, and data indicate record valuations for medium-duty and trailer assets,” Vieth said. “Healthy consumer and corporate balance sheets and pent-up inventory demand translate into continued robust freight markets and still-rising freight rates (to date).”
More information can be found at www.actresearch.net.
The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.
