Surging inflation, rising interest rates and supply chain disruptions remain overarching themes in ACT Research’s latest State of the Industry report.
“The prospect of a U.S. recession has grown materially since Russia’s invasion of Ukraine, and as of the July issue of ACT’s NA OUTLOOK report, a 2023 recession is now the base-case expectation, with freight volumes beginning to contract in Q3’22,” says Kenny Vieth, ACT Research’s president and senior analyst. “Meanwhile, supply chain disruptions remain a wild card, as the war in Ukraine continues and China announced fresh lockdowns following another surge in COVID infections.”
“The takeaway for us is that interest rate hikes to date have not yet slowed inflation sufficiently, meaning the Fed is likely to remain aggressive, risking a deeper recession in 2023 as they work to rein in inflation,” Vieth says. “The prevailing theme cycle-to-date has been one of whack-a-mole, i.e. as shortages of one component are alleviated, another issue arises. Russia and China issues aside, the past two months have seen modest OEM beats of their medium-duty and heavy-duty build plans, suggesting that availability, and possibly visibility, is improving.”
From ACT Research:
- For context, ACT Research saw Class 8 orders rise 16% sequentially in June, cancellations fall to a 12-year low, build rise to its highest level this cycle and heavy-duty retail sales jump to their best result of the year.