COLUMBUS, Ind. — More people and politicians are taking the threat of COVID-19 more seriously is resulting in a “choppy” economic path forward, according to the Commercial Vehicle Dealer Digest released by ACT Research July 27.
The monthly report, which combines ACT’s proprietary data analysis from a variety of industry sources, paints a comprehensive picture of trends that impact the transportation and commercial-vehicle markets. The report includes a high-level forecast summary, complete with transportation insights, and reviews top-level considerations such as for-hire indices, freight, heavy- and medium-duty truck segments, the total U.S. trailer market, used truck sales information and a review of the U.S. macro economy.
“As the virus flared in the weeks following Memorial Day, and exacerbated by the Fourth of July, segments of the economy will be turned off and back on as the authorities work to contain the widening spread of the disease,” said Kenny Vieth, president and senior analyst of ACT. “While we do not believe state-level closures are likely from here, we note that the raging case counts in major Sunbelt states raise the risk of major supply-chain disruptions, if any of those states are shuttered for several weeks.”
When asked how the commercial-vehicle industry is faring during the global pandemic, Vieth said, “Even as the economy struggles to regain its footing post-COVID and pre-vaccine, freight markets should be somewhat less impacted. While we can choose not to go to restaurants, not eating is not an option. To that end, we are reminded of Alan Greenspan’s research that freight volumes on a per capita basis change very little over time. Most freight is related to society’s most basic needs: food, shelter, clothes, transportation.”
Vieth noted that OEMS and, as a result, the supply base, are “pushing hard” to restore material and assembly flows, adding that underlying economics are faring better than initially estimated.
“Additionally, spot freight rates, sitting at the intersection of equipment supply and freight demand, are the leading indicator of heavy commercial vehicle demand cycles, and the sustained rally in spot rates is one consideration leading us to make the case for a steady Class 8 market into the end of 2020,” he concluded.
ACT has created a COVID-19 Market Watch webpage to track noteworthy high frequency macroeconomic and transportation-specific market indicators.