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Home » Truck builders enjoy “healthy” 2023 outlook despite economic headwinds

Truck builders enjoy “healthy” 2023 outlook despite economic headwinds

Class 8 sales and manufacturing stay high thanks to pent-up vehicle demand, ACT says.

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February 13, 2023
Supply Chain Quarterly Staff
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Sales and manufacturing trends for class 8 trucks are “healthy” heading into 2023 thanks to pent-up vehicle demand and elevated carrier profits, according to a report from the transportation sector analyst firm ACT Research.

Those trends come despite business headwinds such as a stumbling freight picture, higher financing costs, and increasingly restrictive credit availability, the Columbus, Indiana-based firm said in its “North American Commercial Vehicle Outlook.” 

In fact, those stormy conditions have already dampened results from several slices of the freight market in recent months, including cargo imports as well as air, intermodal, and trucking results.

Those wider trends may eventually catch up with truck vendors too, thanks to the pincers of high inflation and interest rates, but the sector will likely be able to weather the storm with minimal damage, the firm said.

“We continue to expect a recession in the first half of this year leading to an incremental year-over-year decline in 2023 Class 8 build from 2022 as freight market weakness increasingly weighs on demand into the year’s second half,” Kenny Vieth, ACT’s president and senior analyst, said in a release. However, he added, “While the Fed may continue raising interest rates in 25-basis point increments longer into 2023 than currently envisioned, we do not believe the pace of rate hikes will be aggressive enough to sharply impact commercial vehicle market performance.”

“The industry enters 2023 with a fair amount of visibility, thanks to a robust backlog. While down year-over-year, the December-ending Class 8 backlog represents the fourth highest year-end backlog on record. With this as context, our call for strong production in 2023 is hardly a stretch,” Vieth said. “That said, we do expect softening, as lower freight volumes and rates, higher costs, improved equipment availability, and the gradual exhausting of pent-up demand begin to exert downward demand pressure.”

 

 

 

Trucking
KEYWORDS ACT Research
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