Recession Depends on Definition: U.S. Economy Poised for 1.8% Expansion
JAN 21, 2020 - 6:55 am
According to ACT Research’s latest State of the Industry: NA Classes 5-8 Report, the U.S. economy is poised to expand by 1.8% in 2020.
“The risk of an economy-wide recession that was a growing concern through Q3/19 has largely faded, with healthy consumer fundamentals expected to provide sufficient momentum to get through the slow patch in industrial activity,” said Kenny Vieth, ACT Research’s president and senior analyst. “That said, the manufacturing recession continues, and the supply-demand imbalance between trucks and freight currently weighing on carrier profitability is likely to extend deep into 2020.”
Speaking about the Class 8 market, Vieth said, “For those keeping score, 2019 was the second-best year in history for Class 8 production, trailing only the EPA’07 prebuy-driven volumes of 2006. While a downturn is expected this year, the silver living is that the expected production decline in 2020 will pale compared to the 42% drop recorded in 2007.”
Regarding the medium-duty markets, he commented, “Choosing not to do a 50-year lookback, we are calling 2019 the new record year for medium duty vehicle production, eclipsing the previous record set in 1999. And although the cycle is shallower, it isn’t so different from the heavy-duty experience over the course of last year, including lower orders, inventory building and a sharp decline in backlogs that will constrain the industry in 2020.”
ACT’s State of the Industry: NA Classes 5-8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders, and retail sales. Additionally, Class 5 and Classes 6-7 are segmented by trucks, buses, RVs, and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs. This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package. A first-look at preliminary net orders is also published in conjunction with this report.
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