Furthermore, same dealer sales of used Class 8 equipment continued to struggle in December; however, sales remain well above year-to-date levels. In the Class 5-7 market, the truck segment continued to buoy the total medium-duty market.
The report in ACT’s Transportation Digest also suggests that U.S. economic growth in 2019 remains in a positive, if less certain, environment.
“The month of January was marked by high volatility in policy, in financial markets and in the data trends we follow,” says Kenny Vieth, ACT Research president and senior analyst. “Even in these turbulent times, the whipsawing of the past several months is atypical; while continuing growth is expected, uncertainty surrounding U.S. trade policy and a slowing global economy warrant caution.”
Regarding the Class 8 market, Vieth says, “The heavy-duty truck market is maintaining its momentum, but the critical question remains cycle duration. Putting the pieces of the puzzle together, we continue to maintain a largely unchanged Class 8 outlook, which anticipates that a growing supply-demand imbalance will erode demand into the end of the year.”
In its Commercial Vehicle Dealer Digest, ACT probes whether the current record-setting Class 8 cycle will close differently than previous peak periods.
“ACT’s analysis of Class 8 cycles shows that peak build typically lasts between 13 and 15 months. The lone exception being the EPA’07-prebuy driven 2005-2006 cycle, which ran a remarkable 27 months at peak build rates,” says Vieth “Given the exogenous benefits accrued from miles-per-gallon and safety technologies, we have to consider if the conditions are in place for this cycle to run farther than history would suggest.”
Vieth adds, “Given slower freight growth, an easing of driver supply constraints, the resumption of the long-run freight productivity trend and strong Class 8 tractor fleet growth, which are increasingly pressuring rates and by extension trucker profits, our forecast assumes a moderating of the Class 8 cycle into the end of 2019.”
