New COVID Cases Threaten Economic and Commercial Vehicle Recovery

ACT Research says resurgence of COVID-19 across many states raised the specter of renewed closings and possible acceleration of layoffs

According to ACT Research’s recently released Transportation Digest, the tug of war between positive and negative influences on the business environment and trucking reached a pivotal juncture at the end of June, but escalation in new COVID cases since mid-June threatens to abort this nascent recovery.

“The sudden shock of the COVID-19 recession pushed the market off the edge of the cliff in March and April, but almost as swift and sharp was the rebound in the economy and in freight in May and June,” said Kenny Vieth, ACT’s President and Senior Analyst. He added, “Recognizing that we are at a fork in the road, our guess is the positive momentum of the last two months can be sustained, but that depends on the ongoing trajectory of the contagion curve, future policy responses, changes impacting key goods-producing and distribution industry activities, and international economics, just to name a few.”

Vieth continued, “Economic reports released in early June depicted an economy that was recovering at a seemingly stronger-than-expected pace, encouraging an air of optimism regarding the advancing pace of activity.” He further explained, “Unfortunately, toward the end of June, a resurgence of COVID-19 across many states raised the specter of renewed closings and possible acceleration of layoffs, highlighting the uncertainty that still clouds the business outlook.”

Vieth noted that the pandemic isn’t the only point of concern, despite its top billing, “The US energy sector remains vulnerable, increased trade tensions with China are another consideration, as well as the restructuring of the retail sector, and from there we can’t forget potential issues surrounding commercial real estate as well as general credit market conditions that may pose risks just over the horizon.”

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