A rising tide lifts all boats, so John Blodgett, vice president of sales and marketing at MacKay & Company and frequent contributor to Truck Parts & Service, began with an overview of the current economic conditions during GenNext’s webinar, “The Future of the Aftermarket in 30 Minutes,” held Thursday.
“The economy plays a big part in the aftermarket, so we think it’s important to look at what’s going on. We are 111 months into economic expansion. The expansion started in June 2009 and it has been a long expansion [period],” Blodgett says,
The longest expansion period was 120 months in the 1990s, but the current expansion period could surpass it, he adds. MacKay & Company suggests that the expansion period soon will be entering the boom phase, which is still a positive economic condition but more unstable and precedes a recession.
That said, Blodgett says truckable economic activity (TEA) will be strong for the balance of the year and could continue at least until the first quarter of next year. Strong TEA is being driven, in large part, by consumers continuing to buy goods and companies continuing to invest in their businesses. The one caveat is the United States’ fluid position regarding tariffs and imports and exports, which “will have a big impact on trucking,” he says.
Another factor affecting the industry is how many Class 6-8 vehicles are being added into the aftermarket. “We’ve added close to 200,000 [Class 8 trucks] last year and the forecast is to add another 235,000 or so this year and, forecasted by FTR, up to 264,000 next year. To me, that’s another indication that FTR is anticipating a strong year, which, in the long term is good for the aftermarket,” Blodgett says.
Blodgett says the market this year will come in at about $31.4 billion for the heavy-duty parts aftermarket for Class 6-8 trucks, trailers and container chassis, which is up about 6 percent over last year.” He adds that MacKay & Company doesn’t forecast recessions in its aftermarket outlook but will adjust its forecast if conditions start changing.