COLUMBUS, Ind. – ACT Research has increased its commercial vehicle forecast across the board in October.
“Central to our growing bullishness on current activity translating into the next up-cycle are the non-traditional drivers of current freight market strength, even as more traditional drivers remain in the wings,” said Kenny Vieth, ACT’s president and senior analyst. “We’re seeing a Covid-driven consumer and business substitution of spending from services to goods, and while a vacation or business trip doesn’t fit into a truck, lumber and technology do.”
Residential investment is being boosted by low interest rates, millennial demographics, and urban escapes, Vieth noted. Freight is also being driven by business inventory restocking, which ACT Research said will benefit truck freight into mid-2021.
“By Q1 2021, the current manufacturing cycle will hit a nine-quarter downturn, suggesting a tightly coiled spring of pent-up demand, also good for freight and ultimately commercial vehicle demand,” Vieth said.
“That said, our thesis does rest on three impactful caveats: a successful Covid vaccination program in place by around the second quarter of next year, Congress passing significant legislation to support left-behind economic sectors, and the potential for a flood of drivers into a market that still has considerable parked equipment, thereby blowing up the favorable rate environment that fleets are enjoying currently.”
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