ECONOMIC WATCH: 2021 to be ‘transition year’ for economy, CV demand

by Today's Trucking

COLUMBUS, Ind. – In its North American Commercial Vehicle Outlook, ACT Research predicts 2021 will be a transition year for global economies and North American commercial vehicle demand.

“Without clear forward visibility on the Covid-19 endgame, the crystal ball is particularly opaque, as the economy begins to re-emerge from its medically-induced coma,” said Kenny Vieth, ACT’s president and senior analyst. “Even as we work through the logic and implications of bigger picture issues, more practical considerations for 2021 forecasts arise.”

He added, “History shows that even from the lowest lows, the manufacturers can’t snap their collective fingers and bring production up immediately. Returning to normalized production levels is a process that is hard to rush.”

Because the underlying economy was “structurally sound” going into the Covid-19 pandemic, and government support has been strong, “there is a case for the economy to rebound into 2021,” Vieth said.

As for the medium-duty truck market, Vieth said, “Underlying fundamentals for the medium-duty market took a direct hit from Covid-19, as it impacted the consumer portion of the economy severely. The heavy Class 8 and trailer markets are seeing falling orders, rising cancellations, and backlogs getting pushed to later build dates. When the economy ultimately rebounds, accessible capacity is likely to be short, leading to strong rebounds in freight rates, carrier profitability, and ultimately unseated vehicle replacement demand.”

ACT Research
Kenny Vieth

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