Commentary: 2020 Aftermarket Forecast Reboot

By John Blodgett, MacKay & Company

I remember when this pandemic started, I thought, “I can do this social distancing; no employees at the office for a couple weeks and on April 6, everything will be back to normal.” This is week six by my count and I have forgotten what normal was. I see highlights on TV occasionally.

Random experiences during this pandemic: A commuter passenger train stopping at rush hour in my village, no one gets off — usually about 75 folks get off. Unbelievable amount of pedestrian traffic in front of my house — 90 percent of people I have never seen before, and they all own dogs. Ping-pong, darts, croquet and basketball hoop — all back in operation at our house. I only (knock on wood) know one person (barely) who has been infected so far, and the only reason I know is because he was the first NFL player to announce he had experienced the virus.

Cubs currently are undefeated this year. I received a 20 percent discount for paying cash for a car repair. I am going to put all my COVID-19 Zoom meeting pictures in one frame. I had a call with 10 buddies across the country — I am the only one who can’t play golf (due to a state restriction, not a comment on my ability to play golf). I am rambling more than usual but good news: No fever.

Okay, back to reality and an updated forecast on the parts aftermarket in the U.S.

After a couple weeks of this pandemic, it became apparent that our aftermarket forecast for 2020 was no longer good. COVID-19 was and is having a significant impact on most sectors of the economy and the vehicles that work in those sectors, some more than others like schools and school buses.

Our team completed a deep dive look at all 10 vocations into which we segment the operating universe and the immediate impact and outlook by quarter for the balance of the year. We referenced a lot of input from available resources, including our TEA (Truckable Economic Activity) Report details and history. In the end, there was also a lot of gut feel on how quickly we will come out of this and what vocational segments initially will do better than others.

From our original January 2020 forecast, we anticipate the aftermarket for medium- and heavy-duty vehicles, trailers and container chassis to be down 20 percent in the U.S and Canada. Our initial forecast of the aftermarket incorporating the COVID-19 impact was put together three weeks ago. Typically, when we announce a change in our forecast, we update our online database for our clients. We decided to hold off on this in the hope that our analysis would be wrong, and, in a few weeks, we could provide a more positive forecast.

Unfortunately, we have seen no significant changes that would lead us to adjust our forecast — we have actually seen more confirmation that we should stick with it. This doesn’t mean things can’t be better than our forecast for the year. We would love to report we were wrong and that most sectors of the economy came back much stronger than we anticipated. Unfortunately (yes, two in the same paragraph), we are starting to think that the first half of 2021 may not be as strong as we originally anticipated, but let’s get through 2020 first.

John Blodgett has worked for MacKay & Company for more than 20 years and is currently vice president of sales and marketing, responsible for client contact for single- and multi-client projects. He can be reached at john.blodgett@mackayco.com.

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