ACT: U.S. Economy Improves in April, CV Industry Looking Toward Recovery
JUN 26, 2020 - 6:46 am
In the release of its Commercial Vehicle Dealer Digest, ACT Research found much more to like about the state of the economy today than was visible one month ago now that the U.S. reopening is underway.
“The reopenings that have been occurring since late April represent the first steps in the march toward economy recovery and green shoots are sprouting thanks to massive stimulus from Congress and the Federal Reserve,” Kenny Vieth, president and senior analyst at ACT Research, said. “Despite that investment, which is helping to put the economy back on track, the pandemic remains a ticking clock for many Americans whose unemployment benefits will start expiring in September.”
Regarding how the CV industry might be moving forward, Vieth said, “Demand recovery beyond replacement levels is a process that takes quarters to achieve. We see the economy expanding rapidly in 2021, creating an imbalance between effective capacity, the ability to get drivers back into seats in real-time and freight demand.
“When that imbalance comes, it will be the match that lights the long fuse on a meaningful volume recovery. At that point, on top of market-driven demand, short-trade cycle fleets will have considerable pent-up replacement demand. That replacement activity will be supported by strong demand for desirably-spec’d late-model vehicles.
“While it is hard to see silver linings presently, we note that this economic downturn was not triggered by the usual supply and demand considerations, bubbles, financial issues, etc., but by a disease. Coupling an otherwise structurally-sound pre-COVID economy, with strong Federal Reserve and Congressional support, and rising pent-up demand, there is a case to be made that the economy will respond strongly into 2021. We believe that the maturing millennials will be the key to pushing the economy forward as they resume their transition to marriage, kids and mortgages.”
The Commercial Vehicle Dealer Digest, which combines ACT’s proprietary data analysis from a 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 U.S. macro economy.
In recognition of the virus’ impact, ACT Research created a COVID-19 MARKET WATCH webpage to track noteworthy high frequency macroeconomic and transportation-specific market indicators.
By the end of 2019, there were 279.6 million vehicles operating on roads nationwide. Of these, government agencies operated nearly 1.2 million vehicles, as reported in the most recent Bureau of Transportation Statistics Report . The U.S. federal government operates... read more
Throughout the past five years, several organizations have published multiple studies attempting to quantify the impact of various levels of corporate diversity on increased shareholder value, customer satisfaction and employee engagement, otherwise known as the “Big Three.” “Why Diversity Matters,”... read more