Factors Signal a Fundamentally Weaker US Tractor Market in 2024

ACT Research reports ongoing pent-up vocational truck demand, strong tractor demand in Mexico, and labor hoarding

ACT Research believes that “it’s different this time” factors are at work in 2024, and those factors will help support a fundamentally weak US tractor market.

Those factors include ongoing pent-up vocational truck demand, strong tractor demand in Mexico, and labor hoarding.

“Just as specialty trailer demand remains strong, the US economy is likewise tilted to benefit specialty trucks. Presently, the longest Class 8 backlogs are for US and Canadian vocational trucks. Like vocational market demand, Mexico’s Class 8 tractor backlog-to-build cushion is more than double that of the US or Canadian tractor markets,” according to Kenny Vieth, ACT’s President and Senior Analyst.

While specialty vehicle markets and Mexican truckers are expected to provide support into 2024, domestic tractor market fundamentals are less bullish. Regarding carrier profits, Vieth added, “The all-star team of carriers that make up ACT’s carrier database saw Q2 incomes plummet. With spot freight rates still soft and contract rates remaining under pressure, the forecast for carrier profits is continued weakness before incomes begin to expand again in Q2’24. If our forecast for higher profits into the end of 2024 is correct, support into 2025 is on the horizon.”

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