ACT Research: U.S. Economy, CV Demand Strong Despite Production Constraints

In the recent release of its Commercial Vehicle Dealer Digest, ACT Research reported that while the U.S. economy and commercial vehicle demand remain strong, so do the constraints that have been hampering production for the better part of this year.

“U.S. GDP growth is projected at 6.2% this year and next. That bullish outlook is predicated on solid freight metrics and consumers who continue to spend at relatively higher rates on goods, as well as millennial demographics, record savings and wealth and pent-up housing demand that all bode well for continued strength in freight-related economic activity,” Kenny Vieth, president and senior analyst at ACT Research, said. “Regarding commercial vehicle demand, medium-duty, heavy-duty and trailer backlogs are essentially filled into 2022, with backlog-to-build ratios well above traditional ranges and inventories below traditional thresholds.

“While the semiconductor situation is not expected to be rectified this year, there are reports of supply improvements, but those have not yet translated into higher build rates. If spot rates are any guide, steel supplies also remain tight. As well, keeping and growing staff amidst demographic challenges during a pandemic is no easy feat. Add to these other anecdotes suggesting an entire vehicle worth of parts are in short supply, from tires to foams and plastics and more. Added together, these points continue to make clear that supply chain constraints, rather than fleet/consumer demand, are the primary drivers of vehicle production in 2021.”

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