ACT Research: Strong Economic Activity and Capacity Constraints Impacting CV Markets

According to ACT Research’s latest State of the Industry: NA Classes 5-8 report, data through the first two weeks of June suggest that North America is at or very near the top of the freight rate expansion, which has been setting new highs on an almost monthly basis since last August. While at or near the peak in terms of freight rates, the economic outlook is optimistic in anticipation of an extended runway of strong activity.

“As has been the case since the start of the year, supply chain constraints, rather than fleet/consumer demand, will be the primary determinants of how many vehicles are produced this year,” Kenny Vieth, president and senior analyst at ACT Research, said. “While the list remains long, build expectations suggest that work-throughs are coming into place. For example, the semiconductor situation is not expected to be fully rectified by the end of 2021, but reports suggest improvement from here as chip supplies are reallocated to higher-value goods producers. And while spot Midwest steel prices posted a new record high in early June, they have leveled off since, which is perhaps an early indication that supply is finally catching demand.”

By commercial vehicle segment, Vieth said, “May’s Class 8 data showed no real surprises. Orders aligned with preliminary reporting, build and backlogs were close to expectations, cancellations continued to border on nonexistent and inventories and sales were consistent with recent levels. Additionally, broad-based economic strength continues to build the best medium-duty market since ACT began reporting data. In May, three-, six- and 12-month order metrics (three and six seasonally adjusted) all rose to best-ever levels, eclipsing the prebuy-fueled volumes of 2006.”

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