ACT Research analysts believe the probability of a mild recession is now nearly as likely as that of their base-case scenario, and that the odds of a recession materializing, in some form or fashion, are essentially 50/50 relative to their slowing topline growth into a modest freight recession base case.
“With the current head of steam that includes healthy consumer and business balance sheets, strong employment demand, and pent-up manufacturing sector activity, this inflation driven economic slowdown is on one hand somewhat unique,” Kenny Vieth, ACT’s president and senior analyst, said. “On the other, traditional recession predictors are in play: Fed rate hikes, high energy prices, negative exogenous events and falling equity valuations come to mind. Some have called the current period of turbulence, unprecedented, and there is a growing consensus around the notion that we promote here: A slowdown is coming. We don’t know if it will be shallower or deeper.”
“At this point, still strong carrier profitability and pent-up demand mean that this year’s expectations for commercial vehicle demand remain essentially unchanged, with full-year production volumes still primarily dependent on supply-chain outcomes,” Vieth said regarding what ACT thinks this means for commercial vehicle demand and build for the remainder of 2022.
This analysis appears in ACT’s Commercial Vehicle Dealer Digest 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 US macro economy.