Despite Downside Risks, Still Much to Like About US Economy & CV Markets

ACT Research reports used commercial vehicle prices are at record levels across Class 8 age and mileage nodes

In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that despite materially higher downside risks to the outlook, there is still much to like about the US economic setup, with jobs continuing to outstrip the supply of labor, corporate profits coming off record performance in 2021, and consumers’ balance sheets remaining well positioned – if less well positioned than before the recent market correction.

Asked about how the economic situation impacts commercial vehicle markets, Kenny Vieth, ACT’s President and Senior Analyst, noted, “For the guys who buy commercial vehicles, the virus continued to bend consumer spending to goods and away from services in early 2022. Port backlogs and inventory restocking should support freight volumes through the first half of this year, but the longer oil prices remain elevated, the more business and consumer dollars will be diverted.” He elaborated, “In addition to significant lingering port congestion, pent-up demand in the manufacturing sector broadly remains elevated and corporate profits continue their record-setting run, allowing businesses to invest in productivity enhancing equipment.”

About effects on the transportation industry, he commented, “Used commercial vehicle prices are at record levels across Class 8 age and mileage nodes. Data indicate record valuations for medium-duty and trailer assets as well.” He concluded, “As 2022 progresses, it is becoming increasingly clear that any victory in the form of higher production and sales is going to be hard fought. Be it inflation, supply chain, or now heightened geopolitical concerns, makers and buyers of commercial vehicles will face more challenges in discharging their duties this year.”

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