COLUMBUS, Ind – The US Class 8 tractor outlook has deteriorated further in Q2, as published in the latest release of the North American Commercial Vehicle OUTLOOK.
ACT’s US Tractor Dashboard, a metric that provides forward-looking market insight by encompassing variables that take both supply and demand into account, underscores the trend downward.
“Following a -7 reading in March, ACT’s 15 metric Dashboard has posted back-to-back -11 readings, with negatives interspersed through the macro, freight, and industry metrics that comprise the aggregate,” according to Kenny Vieth, ACT’s President and Senior Analyst.
“Were these ‘normal’ times, the implied stepdown in support would be signaling increased tractor market weakness into next year. The wildcard as we look to 2025 is carriers’ appetite to add equipment ahead of the EPA’s expensive 2027 clean truck mandate,” he added. “Typically, the market’s individual components tend to be more closely sync’d and cycle together into a market downturn. With North America’s economies all growing, and recognizing tractor market risk to the forecast, there are certainly positive factors at play as we look to 2025—robust US and Canadian vocational markets and the best Mexican market in a decade are certainly helping to offset the impending trough in tractor demand that is expected to last into mid-2025.”
There are still several pockets of strength in the Class 8 market, but:
- for-hire carrier profits are at levels not seen since 2010;
- deep into the bottom of the cycle, there has been no tractor market capacity rationalization to date, only capacity additions;
- excessive capacity expansion has left freight rates at recessionary levels, continuing to prolong the downturn; and,
- while still expanding, the pace of the economy’s recovery is running at about half the 4%-plus GDP rate of 2H’23.
The N.A. CV OUTLOOK reports on the trucking industry forecast, providing a status of commercial vehicle demand, tactical and strategic market analysis and forecasts ranging out five years. The report’s objective is to give OEMs, suppliers, investors, and other interested market participants the information they need to make informed decisions in what is traditionally a deeply cyclical market. The report provides a complete overview of the North American markets, touching on relevant demand drivers starting with forward-looking activity metrics, orders and backlogs. Information included in this report covers build and retail sales forecasts and current market conditions for medium- and heavy-duty trucks/tractors, and trailers, North American macroeconomics by country, freight and carrier market performance, used equipment valuation trends, and regulatory environment analysis and impacts.
Bruce Guthrie is an award-winning journalist who has lived in three states including Arkansas, Missouri and Georgia. During his nearly 20-year career, Bruce has served as managing editor and sports editor for numerous publications. He and his wife, Dana, who is also a journalist, are based in Carrollton, Georgia.
