ACT Research: Dominant Issues Continue to Shape Commercial Vehicle Outlook

According to ACT Research’s recently released Transportation Digest, supply chain difficulties, COVID-19, inflation, high energy prices, robust freight and rates and public policy continue to be the dominant issues shaping the heavy-duty trucking outlook.

“Class 8 demand remains strong, but the ability of manufacturers to respond to that demand continues to be constrained,” Kenny Vieth, president and senior analyst for ACT Research, said. “Higher prices are the inevitable result, and that will remain the case through much of 2022. We believe these conditions will gradually be alleviated, but risks will be higher than usual for a wide set of possible outcomes around our base case. Freight market equilibrium, the supply-demand balance between equipment and drivers and freight volumes, probably won’t be achieved until the fourth quarter of next year.”

In discussing the impact of COVID-19 variants on ACT Research’s commercial vehicle forecasts, Vieth said, “The single most important new development impacting — and adding risk to — the near-term heavy-duty forecast has been the global spread of the new COVID omicron variant. As important as the disease itself is, the reaction of civil authorities and the public at large to omicron — as well as to future variants that may crop up in 2022 and beyond. We can hope that lessons learned from the experience of the last two years would at least aid with directional guidance on a macro and micro basis. For our forecasts, one lesson is that demand for goods holds up fairly well during a pandemic compared to services, especially if those services are public-facing. Sectors closely associated with activity in goods production and distribution (manufacturing, construction, mining, agriculture, wholesale and retail) are transportation-intensive and generally trucking-intensive. So, by its very nature, demand for heavy trucks has a natural, in-built COVID immunity.”

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