"Heavy-duty orders continued to disappoint in April," says Kenny Vieth, president and senior analyst at ACT. "However, OEM build plans remain aggressive. For those build plans to come to pass, orders need to recover sooner, rather than later. A continuation of reasonable freight growth, strong trucker profits, and healthy used truck prices are expected to support demand once the current period of uncertainty is worked through."
In its May issue of the its North American Commercial Vehicle Outlook, ACT said it continues to believe that U.S. economic activity in 2012 will expand at a moderate pace of 2.2%, with slow employment growth acting as a brake on more robust growth. Inflationary pressures are expected to hover in the 2% area. The March and April softening in Class 8 truck orders to "below expectations" was not enough to make ACT forecasters lower their existing ACT build and sales forecasts.
"Because the 2012 forecast was already discounted for risk, and because industry backlogs are large, we remain comfortable with our 2012 forecast," says Vieth, ACT's president & senior analyst. Vieth cited healthy trucker profits, solid used truck values, an old fleet, and a clear path to continued profitability as factors supporting the forecast. "Our expectations for the cycle peak in 2013 are shallower with stronger demand now stretching through 2014."