Despite Current Economic Activity, 2023 Decline Yet to Come

ACT Research reports factors mitigating a sharper commercial vehicle market downturn in 2023 include pent-up demand and the potential for some prebuying

In the release of its Commercial Vehicle Dealer Digest, ACT Research reported a slightly raised 2022 GDP forecast despite current economic activity, but analysts continue to expect a decline in 2023.

According to Kenny Vieth, ACT’s President and Senior Analyst, the Federal Reserve will continue to aggressively raise interest rates so long as inflation remains elevated. He added, “Not only has the Fed telegraphed this aggressive stance, but economic data suggest the Fed has little choice. It is our view the Fed will continue on its course of tighter monetary policy as still deep-pocketed consumers and businesses drive demand for labor in structurally constrained labor markets.”

Factors mitigating a sharper commercial vehicle market downturn in 2023 include pent-up demand and the potential for some prebuying. He added, “As we have long argued, carrier profits are the critical element in vehicle demand. Profits in 2023 are anticipated to be lower, but even modeling a sharp downturn—the worst since 2007—truckload (TL) net margins are projected to be the fourth best on record.”

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