Post-Lockdown Conditions Idyllic for Commercial Vehicle Demand, But Are Production Levels Sustainable?

ACT Research reports freight backlogs at the nation’s ports remain long, inventories need restocking, and pent-up demand for manufactured goods continues to grow

According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, for much of the past 20 months post-lockdown, economic conditions have been idyllic broadly, and particularly for commercial vehicle demand.

According to Kenny Vieth, ACT Research’s President and Senior Analyst, “GDP grew at its fastest rate since 1984, and ACT’s GDP-based freight proxy grew at best-ever levels in 2021. With inflation surging to 40-year highs, treasury yields rising and the Russians camped out on Ukraine’s borders, the outlook is less bright than it was, but it remains pretty darned good, as record corporate profits and consumer wealth look to sustain economic activity as we move through early 2022.” He added, “For commercial vehicle demand, the table remains well-set, with Omicron keeping consumer spending focused on goods and away from services. Freight backlogs at the nation’s ports remain long, inventories need restocking, and pent-up demand for manufactured goods continues to grow. In short, commercial vehicle demand remains well positioned in early 2022.”

Regarding commercial vehicle segment production, Vieth commented, “In the case of Class 8, the OEMs followed December’s high-side production surprise with a second consecutive build plan beat in January. For Classes 5-7, build surged into year-end only to fall sharply in January.” He explained, “Following December’s high-side medium- and heavy-duty production breakout, a consistently asked question has been, ‘Are December’s rates sustainable?’ Clearly, January’s production numbers leave us with a hung jury.”

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