Despite stumbling freight, higher finance costs and restrictive credit availability, ACT Research continues to see healthy sales and build trends for Class 8 trucks this year – even in the face of a likely recession potentially inbound by June.
Pent-up vehicle demand and still historically elevated carrier profits early this year continue to prop up demand for new equipment, ACT’s latest release of the North American Commercial Vehicle OUTLOOK reported.
“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," said Kenny Vieth, ACT’s President and Senior Analyst. "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.”
Part of what is continuing to fuel demand for trucks and trailers is a freight environment that now seems unlikely to reach the kind of depths many forecasted near the end of 2022.
Truckstop.com's semi-annual freight broker survey shows brokers are less pessimistic than anticipated given the challenges the industry faces from declining volume and rate pressure. Broker demand sentiment is rather upbeat, with about 41% of respondents citing an uptick in volume in the second half of 2022 compared with a year earlier, about 6 percentage points lower than in its first half of 2022 survey. Though more respondents reported growth, the magnitude of declines were greater.
"Freight brokers appear unfazed by the collapse in spot truckload rates and the effects of moderating economic activity on demand, contractual rates and gross margins," said Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence. "Only 12% of respondents expect gross margins to contract over the next six months."
Brokers also remain relatively optimistic about demand growth. About 49% of those surveyed in the Truckstop and Bloomberg Intelligence Survey expect demand growth over the next six months versus 45% in the first half of last year, and 76% in the second half of 2021.
