ACT Research Forecasts Slights Increases in Class 8 Retail Sales for Rest of 2023
JUN 13, 2023 - 6:50 am
According to ACT Research’s latest North American Commercial Vehicle Outlook, forecasts for the Class 8 market call for slight year-over-year increases in retail sales and production volumes in 2023, reflecting stronger momentum into Q3/23. However, ACT continues to forecast deteriorating sales and build in Q4/23.
“The industry is closing in on this cycle’s downward inflection point as strong vehicle production and sales continue in the face of weak freight creation and the exhaustion of pent-up demand in 2023,” Kenny Vieth, president and senior analyst of ACT Research, said. “Collectively, lower freight rates, shrinking carrier profits, higher equipment and borrowing costs, and improved equipment availability put downward pressure on demand overall.
“Even though we are closing on this cycle’s tipping point for commercial vehicle demand, we are encouraged by the economy’s resilience as evidence that the economy’s chances of dodging a recession accumulate. While the expectation is for tepid growth in the near term, it is an improvement from torpid. The economy’s ongoing above-expectations performance allows us to modify our U.S. forecast, taking an anticipated recession out of our projections for the economy.
“As we look from here to the end of 2023, like a tide-race, there are competing forces at work. On one side of the scale are building downside pressures, the slow economic expansion, weak freight volumes, rising carrier profit pressures and fading pent-up demand. Those negatives are currently balanced against healthy carrier balance sheets and supportive pent-up demand at the start of 2023, and the likelihood of a CARB-induced prebuy in California into the end of the year. As the force of pent-up demand fades and payback replaces prebuy in 2024, it is worth noting that our expectation for the timing of a downturn in heavy vehicle demand could be a quarter later than our expectations, but it is unlikely to be two quarters later.”
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