Strong June boosts trucking forecast for remainder of 2020

Updated Jul 16, 2020
01.20.Kenny Vieth ACT-min

ACT Research announced in its newest North American Commercial Vehicle Outlook report that it has upgraded its commercial vehicle industry forecast.

ACT Research sources the uptick to the impact of the nearly $6 trillion in stimulus to date, better-than-expected economic activity in June, freight rates boosted by a driver shortfall that was created by massive layoffs and extended unemployment benefits, and preliminary June metrics that were well above trend.

“COVID-19 continues to impact the commercial vehicle industry, as well as the U.S. and global economies, but we do not believe state-level closures are likely from here,” says Kenny Vieth, ACT’s president and senior analyst. “That said, the raging case counts in Sunbelt states raise the risk of supply-chain disruptions, if any of the heavily-impacted states are shuttered for several weeks, as too much July 4th weekend fun is expected to drive a case surge into the end of the month.”

Vieth says despite this forecast upgrade, a vaccine continues to be the key to unlocking a more broad-based recovery “as the simplest human interactions will no longer have to be weighed and justified.”

He adds, “Even as the economy works to regain its footing post-COVID and pre-vaccine, freight markets should be somewhat less impacted because, while we can choose not to go to restaurants, not eating is not an option. Most freight is related to society’s most basic needs: food, shelter, clothes, transportation.”

And regarding equipment demand in particular, Vieth and ACT Research say data indicates the new vehicle market could rebound faster than first anticipated.

“Combined with the OEMs and their supply base pushing hard to restore material and assembly flows, underlying economics do not appear to be as punitive as initially estimated,” he says. “Additionally, spot freight rates, sitting at the intersection of equipment supply and freight demand, are the leading indicator of heavy commercial vehicle demand cycles. Because of these factors, we’re seeing stronger and sooner production increases.”

Learn how to move your used trucks faster
With unsold used inventory depreciating at a rate of more than 2% monthly, efficient inventory turnover is a must for dealers. Download this eBook to access proven strategies for selling used trucks faster.
Download
Used Truck Guide Cover