ACT Research: Factors Signal a Fundamentally Weaker U.S. Tractor Market in 2024

Factors are at work in 2024, and those factors will help support a fundamentally weak U.S. tractor market, according to ACT Research’s latest release of the North American Commercial Vehicle Outlook.

Those factors include ongoing pent-up vocational truck demand, strong tractor demand in Mexico and labor hoarding.

“Just as specialty trailer demand remains strong, the U.S. economy is likewise tilted to benefit specialty trucks. Presently, the longest Class 8 backlogs are for U.S. and Canadian vocational trucks. Like vocational market demand, Mexico’s Class 8 tractor backlog-to-build cushion is more than double that of the U.S. or Canadian tractor markets,” Kenny Vieth, president and senior analyst of ACT Research, said.

While specialty vehicle markets and Mexican truckers are expected to provide support into 2024, domestic tractor market fundamentals are less bullish. “The all-star team of carriers that make up ACT’s carrier database saw Q2 incomes plummet,” Vieth said. “With spot freight rates still soft and contract rates remaining under pressure, the forecast for carrier profits is continued weakness before incomes begin to expand again in Q2/24. If our forecast for higher profits into the end of 2024 is correct, support into 2025 is on the horizon.”

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