Economic uncertainty has started to bleed into production forecasting in the commercial vehicle sector, experts from MEMA and FTR reported during MEMA’s monthly Pulse webinar on Wednesday.
The supply chain, labor availability and inflation challenges that plagued the supplier sector for 2022 have not dissipated but they have abated over the last few months, replaced by an unusual economy producing goods at a high level but otherwise softening, says MEMA’s Richard Anderson, senior director, market research and analysis.
Within the heavy-duty component sector, Anderson says MEMA members experienced steady increases in production over the latter half of 2022 that carried into the first quarter of this year. He says many manufacturers expect production levels to remain strong for the immediate months ahead but are unsure about how to forecast demand beyond the second half of this year.
The freight market has been remarkably stable over the last six months, ebbing with a general economy that seems uncertain as to if it wants to slip into recession or float through the year with nominal growth. Anderson says any large shift in the economy positively or negatively would at least provide manufacturers clarity about how demand may change so they could adjust their forecasts and production plans for 2024. Today the market has little consensus.
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During Wednesday’s webinar Anderson asked attendees how their expectations for business for the second half of 2023 have changed since the beginning of the year. Responses were muddled, with 38% of responders claiming they have become more pessimistic but 35% saying they are now more optimistic. The remaining 27% of responders said their sentiments haven’t changed.
“That’s about what we’ve been hearing,” Anderson says. “[Suppliers] having difficulty in forecasting.”
