Commercial Vehicle Market Forecasts Upgraded in October

ACT Research says the need for a period of business inventory restocking that should benefit truck freight into mid-2021

According to ACT’s latest release of the North American Commercial Vehicle OUTLOOK, after pulling the cycle forward last month, ACT’s front of the cycle forecasts were marked up across-the-board again in October.

According to Kenny Vieth, ACT’s President and Senior Analyst, said, “Central to our growing bullishness on current activity translating into the next up-cycle are the non-traditional drivers of current freight market strength, even as more traditional drivers remain in the wings.” He added, “We’re seeing a COVID-driven consumer and business substitution of spending from services to goods, and while a vacation or business trip doesn’t fit into a truck, lumber and technology do.”

Vieth continued, “Low interest rates, millennial demographics, and urban escapes have supercharged residential investment, and we’re also seeing the need for a period of business inventory restocking that should benefit truck freight into mid-2021.” He explained further, “By Q1’21, the current manufacturing cycle will hit a nine-quarter downturn, suggesting a tightly coiled spring of pent-up demand, also good for freight and ultimately commercial vehicle demand.” Vieth concluded, “That said, our thesis does rest on three impactful caveats: a successful COVID vaccination program in place by around the second quarter of next year, Congress passing significant legislation to support left-behind economic sectors, and the potential for a flood of drivers into a market that still has considerable parked equipment, thereby blowing-up the favorable rate environment that fleets are enjoying currently.”

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