Carrier profitability and pent-up demand mean this year’s expectations for commercial vehicle demand remain unchanged

ACT Research Says Recession Odds Growing

In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that its analysts think the probability of a mild recession is now nearly as likely as that of their base-case scenario, and that the odds of a recession materializing, in some form or fashion, are essentially 50/50 relative to their slowing topline growth into a modest freight recession base case.

According to Kenny Vieth, ACT’s President and Senior Analyst, “With the current head of steam that includes healthy consumer and business balance sheets, strong employment demand, and pent-up manufacturing sector activity, this inflation driven economic slowdown is on one hand somewhat unique. On the other, traditional recession predictors are in play: Fed rate hikes, high energy prices, negative exogenous events and falling equity valuations come to mind.” He elaborated, “Some have called the current period of turbulence, unprecedented, and there is a growing consensus around the notion that we promote here: A slowdown is coming. We don’t know if it will be shallower or deeper.”

About what ACT thinks this means for commercial vehicle demand and build for the remainder of 2022, Vieth stated, “At this point, still strong carrier profitability and pent-up demand mean that this year’s expectations for commercial vehicle demand remain essentially unchanged, with full-year production volumes still primarily dependent on supply-chain outcomes.”

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