Class 8 forecasts amended down as recovery timetable remains elusive

Class 8 truck and trailer forecasts from ACT Research were lowered this week as recovery in freight markets remains elusive.

“Within the broader Class 8 and trailer markets, U.S. Class 8 tractors and van trailers bore the brunt of the markdowns as freight metrics have failed to gain traction,” says Kenny Vieth, ACT’s president and senior analyst. “Less money in carriers’ pockets and lower industry build rates in 2024 also push down on 2025 and, to a lesser extent, 2026.”

ACT Research reports manufacturing readers especially can appreciate how difficult it has been to attract labor the past two-plus years. If circumstance forces the industry to materially cut production in 2024, thereby having to shed labor, supply-chain integrity could be compromised.

[RELATED: FTR's Starks says trailer market correction incoming in 2024]

“If layoffs do come to pass, it will be difficult for the industry to scale rapidly in 2025 and 2026 when U.S. and Canadian truckers and dealers will want all the equipment the industry can build. ACT’s research suggests that between prices, taxes, and other affiliated costs, medium and heavy-duty vehicle costs will rise by between 12% and 14% as the EPA’s Clean Trucks regulation goes live in 2027,” says ViethAs such, we believe the OEMs will be at least partially successful in convincing customers to begin EPA’27 prebuying in 2024. Starting prebuying earlier should help moderate runaway demand into 2026, but risks prolonging the freight cycle downturn.”

The company also states it believes that “it’s different this time” factors are at work in 2024, and those factors will help support a fundamentally weak U.S. tractor market. Those factors include ongoing pent-up vocational truck demand, strong tractor demand in Mexico, and labor hoarding.

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