ACT: Freight-Generating Sectors of Economy Starting to Mend

In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that freight-generating sectors of the U.S. economy are on the cusp of transitioning from contraction to growth, aligning with freight cycles of the past, which typically last around two years.

“With the current cycle dating from Q4/18, we have entered the sixth quarter of what is typically an eight-quarter process,” said Kenny Vieth, ACT’s president and senior analyst. “While there could be some turbulence surrounding the election, we would note that only once in the 2000s has a freight-cycle trough persisted beyond two years. Similar to data relating to the industrial economy, we are seeing modestly positive and less negative datapoints starting in Q4, and we note that ‘less-bad’ is always the first step in any recovery.”

Vieth also spoke about factors expected to drive the commercial vehicle segment in the next two years, “There are three elements at work in the weak outlook for heavy commercial vehicles in the coming few years: demand, supply, and timing. While some, like the oversupply of equipment, have been on the radar for a long time, others, like the weakness exhibited in key freight-generating economic sectors like manufacturing, came on slowly and inexorably over several months.”

The report, which combines ACT’s proprietary data analysis from a wide variety of industry sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report includes a relevant but high-level forecast summary, complete with transportation insights for use by commercial vehicle dealer executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the total U.S. trailer market, used truck sales information, and a review of the U.S. macro economy.

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