Main Risk to N.A. CV Market Forecasts Remains the Trade War with China

Key Driver of Growth Is US Consumer

According to ACT Research’s (ACT) latest release of the North American Commercial Vehicle OUTLOOK, the primary risk to all vehicle market forecasts, and the US economy broadly, in either direction, remains the trade war with China. With US manufacturers and farmers struggling to compete on the tilted global playing field, the key driver of growth in the mid-term outlook is the US consumer, who remains well positioned to keep the economy out of the ditch.

 “With around 80% of North America’s Class 8 market and about 90% of the Classes 5-7 and trailer markets beholden to the US economy, it is little wonder that ACT’s forecasts focus heavily on the North American, and primarily the US, economy,” said Steve Tam, ACT’s Vice President. He elaborated, “We are seeing weaker-than-expected activity in the economies of Canada and Mexico and our US growth expectations, at 2.2%, are now below start-of-the-year levels. Looking to 2020, GDP growth in all three North American economies is anticipated to fall below 2%, with the US and Canada at 1.7% and Mexico rebounding to 1.4%.”

Regarding the trade war and risk of a recession, Tam commented, “If the President doubles down from here, a greater global downturn could ensue, with the worst outcomes spreading beyond the impact of tariffs and into a global currency war. If Schedule D tariffs are put in place in December, the likelihood of recession rises.”

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