The U.S. class 8 market remains bifurcated, with continued overcapacity leading to generationally weak for-hire tractor fundamentals and stimulus/industrial policy supporting vocational equipment demand, according to the latest release of the North American Commercial Vehicle OUTLOOK by ACT Research.
“On one side of the divide, vocational equipment demand continues to be supported by secular trends and stimulus programs. The clean energy transition and AI are driving utility infrastructure investment, while government programs, such as CHIPS and BIL, have boosted public infrastructure and reshoring projects,” Kenny Vieth, president and senior analyst of ACT Research, said. “In the case of government incentives, the programs are still in the early stages of grant awards, so these programs still have long legs. All the above is long-term positive for construction-related vocational equipment.”
“At the same time, the U.S. and Canadian tractor markets remain awash in capacity, allowing freight rates to rise only incrementally over the past year. The result has been for-hire carrier profitability at the lowest levels since the global financial crisis. For tractors, neither the current worst-in-15-years depression in for-hire carrier financial conditions nor the private fleet spending of the past couple years support strength into 2025 — especially early,” Vieth said. “Adding to near-term demand challenges, ACT projects dealer inventories to be fuller at the start of 2025, so dealers are also seen as more constrained.”
