Executive Briefings

ACT Forecast Continues to Point to Stronger Second Half This Year and Into 2011

Trends in the economy and transportation sector continue to point to strengthening in the truck transportation sector in the second half of 2010, which will then lead to stronger demand for commercial vehicles late in the year and into 2011, according to ACT Research Co. ACT is the leading independent source of analysis in the market for trucks and other commercial vehicles.

In the latest release of the ACT North American Commercial Vehicle Outlook, ACT continues to project that heavy-duty (Class 8) vehicle production will grow 18 percent year-over-year in the first half of 2010, largely due to stronger orders late in 2009 in advance of new EPA 2010 emission-mandate engines and very easy annual comparisons. With fundamentals expected to improve in the truckload market by mid-year, demand is expected to increase into the end of 2010.

Medium-duty vehicle (Classes 5-7) production, which is largely tied to the health of the housing market, is expected to see a more steady, gradual increase through 2010 and 2011.

"As we have been saying for months, a series of events is required to put commercial vehicle production on more solid footing, and those events continue to play out as expected," said Kenny Vieth, partner and senior analyst with ACT Research. "With a modestly improving economy and used-truck values moving higher, finance firms appear less interested in using forbearance to keep vulnerable carriers alive. When you combine increased carrier bankruptcies with record large fleet capacity reduction efforts, the truckload sector is forecast to see freight volumes outstripping tractor supply by mid-year, which will set the stage for dramatic improvements for both trucking and commercial vehicle demand," added Vieth.

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Trends in the economy and transportation sector continue to point to strengthening in the truck transportation sector in the second half of 2010, which will then lead to stronger demand for commercial vehicles late in the year and into 2011, according to ACT Research Co. ACT is the leading independent source of analysis in the market for trucks and other commercial vehicles.

In the latest release of the ACT North American Commercial Vehicle Outlook, ACT continues to project that heavy-duty (Class 8) vehicle production will grow 18 percent year-over-year in the first half of 2010, largely due to stronger orders late in 2009 in advance of new EPA 2010 emission-mandate engines and very easy annual comparisons. With fundamentals expected to improve in the truckload market by mid-year, demand is expected to increase into the end of 2010.

Medium-duty vehicle (Classes 5-7) production, which is largely tied to the health of the housing market, is expected to see a more steady, gradual increase through 2010 and 2011.

"As we have been saying for months, a series of events is required to put commercial vehicle production on more solid footing, and those events continue to play out as expected," said Kenny Vieth, partner and senior analyst with ACT Research. "With a modestly improving economy and used-truck values moving higher, finance firms appear less interested in using forbearance to keep vulnerable carriers alive. When you combine increased carrier bankruptcies with record large fleet capacity reduction efforts, the truckload sector is forecast to see freight volumes outstripping tractor supply by mid-year, which will set the stage for dramatic improvements for both trucking and commercial vehicle demand," added Vieth.

Read Full Article