ACT: COVID-19 Impact Severity Peaks, Potential for Recovery Emerging
MAY 26, 2020 - 7:00 am
According to the ACT Research Transportation Digest, the COVID-19 pandemic is having its most severe impact on North American, and global, economic activity right now. The report noted that the extent of the shock was a near-total surprise to businesses and forecasters in the month of March, but by early April, the broad outlines of the plunge in activity and the potential for a second half recovery started to emerge.
“The short-term path for the economy, for freight, and for the heavy-duty market is pretty clear,” said Kenny Vieth, ACT’s president and senior analyst. “Counter-measures, notably shelter-in-place quarantining, were deployed to ‘flatten the curve’ of contagion, but they have had a directly negative impact on payrolls and productivity.”
“Freight initially had an uptick, with supply chains scrambling to respond to surging final demand as safety stocks of consumer staples, medical supplies, and work-from-home technologies were accumulated,” Vieth continued. “In April, depressed activity in manufacturing, construction, and retail, particularly brick-and-mortar stores, was taking hold, with the slowdown that hit freight in April expected to continue into June.”
Vieth is, however, cautiously optimistic, that there is an end in sight economically, “Our best guess is that the third quarter of this year will mark a transition, with a gradual and slow recovery commencing late in that quarter or in the fourth, followed by a pickup in momentum into 2021.”
In recognition of the virus’ impact, ACT Research has created an easily accessible COVID-19 MARKET WATCH webpage to track noteworthy high frequency macroeconomic and transportation-specific market indicators.
The report, which combines proprietary ACT data and analysis from a wide variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report is designed as a quick look at transportation insights for use by fleet and trucking executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the US trailer market, used truck sales information, and an overview of the US macroeconomy.
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