COVID-19 Impact Most Severe Now, Potential for Recovery Starting to Emerge

ACT Research is cautiously optimistic that there is an end in sight economically

According to ACT Research’s recently released Transportation Digest, the COVID-19 pandemic is having its most severe impact on North American, and global, economic activity right now. The report noted that the extent of the shock was a near total surprise to businesses and forecasters in the month of March, but by early April, the broad outlines of the plunge in activity and the potential for a second half recovery started to emerge.

“The short-term path for the economy, for freight, and for the heavy-duty market is pretty clear,” said Kenny Vieth, ACT’s President and Senior Analyst. He added, “Counter-measures, notably shelter-in-place quarantining, were deployed to ‘flatten the curve’ of contagion, but they have had a directly negative impact on payrolls and productivity.”

Vieth continued, “Freight initially had an uptick, with supply chains scrambling to respond to surging final demand as safety stocks of consumer staples, medical supplies, and work-from-home technologies were accumulated.” He further explained, “In April, depressed activity in manufacturing, construction, and retail, particularly brick-and-mortar stores, was taking hold, with the slowdown that hit freight in April expected to continue into June.”

Vieth is, however, cautiously optimistic, that there is an end in sight economically, “Our best guess is that the third quarter of this year will mark a transition, with a gradual and slow recovery commencing late in that quarter or in the fourth, followed by a pickup in momentum into 2021.”

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