Demand for commercial vehicles expected to remain strong heading into 2021, ACT says

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New Semi Trucks
According to analysts at ACT Research, rising freight rates this fall have brought better profits for many carriers and owner-operators, resulting in continued growth in the demand for new commercial vehicles.

COLUMBUS, Ind. — According to ACT Research’s latest State of the Industry: North American Classes 5-8 Report, with the beginning of COVID vaccine distribution, the likelihood of Congressional assistance for those still suffering from COVID’s impact and healthy freight rates, commercial vehicle demand remains strongly positioned heading into 2021.

“With vaccine distribution starting this week and the likelihood that Congress will finally provide assistance to those left in COVID’s wake, we are more optimistic that we are nearing the end of the pandemic tunnel and are on the cusp of a better 2021,” said Kenny Vieth, president and senior analyst for ACT Research. “Of course, with Americans now dying at a 100,000-per-month clip, these positive developments are tinged with the recognition that considerable misery remains.”

ACT’s 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. Market indicators are differentiated 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. In addition, 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. The report includes a six-month industry build plan, backlog timing analysis and historical data from 1996 to the present in spreadsheet format. A first look at preliminary net orders is also published in conjunction with the monthly report.

Vieth noted that freight rates have been in “record territory” since September, which he says boosts profits and creates a freight-heavy outlook for 2021.

“The rule of thumb oft-heard at ACT, ‘Truckers buy trucks when they make money,’ again passes the test,” he said. “It seems that everyone is ordering in the Class 8 segment, but the tractor market is rising at a considerably more rapid clip, against easier year-ago comparisons, than the truck market. Despite the uptick in orders and build, we do caution that the growing steel shortage and potential for COVID to still wreak havoc on the supply chain could impact build rates into early 2021.”

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