ACT Research: Economic Path Forward Will Be ‘Choppy’



According to its latest Commercial Vehicle Dealer Digest report, ACT Research expects “a choppy economic path forward.”

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

“As the virus flared in the weeks following Memorial Day, and exacerbated by the Fourth of July, segments of the economy will be turned off and back on as the authorities work to contain the widening spread of the disease,” Kenny Vieth, president and senior analyst of ACT Research, said. “While we do not believe state-level closures are likely from here, we note that the raging case counts in major Sunbelt states raise the risk of major supply-chain disruptions if any of those states are shuttered for several weeks.

“Even as the economy struggles to regain its footing post-COVID and pre-vaccine, freight markets should be somewhat less impacted. While we can choose not to go to restaurants, not eating is not an option, and to that end, we are reminded of Alan Greenspan’s research that freight volumes on a per capita basis change very little over time. Most freight is related to society’s most basic needs: food, shelter, clothes, transportation.

“With the OEMs, and subsequently the supply base, pushing hard to restore material and assembly flows, underlying economics do not appear to be as punitive as initially estimated. Additionally, spot freight rates, sitting at the intersection of equipment supply and freight demand, are the leading indicator of heavy commercial vehicle demand cycles, and the sustained rally in spot rates is one consideration leading us to make the case for a steady Class 8 market into the end of 2020.”

In recognition of the virus’ impact, ACT Research created a COVID-19 market watch webpage to track noteworthy high frequency macroeconomic and transportation-specific market indicators.

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