Leading U.S. economists told more than 80 attendees at the March 5 National Truck Equipment Association 2002 Economic Update in Orlando, Fla., that the recession affecting the commercial truck and transportation industry has reached a trough
and the economy will begin to expand again by the second quarter of 2002.
The trailer market is not expected to begin seeing economic recovery until year-end. While the overall outlook for the truck industry points toward recovery, the heavy truck market outlook is less than rosy.
"The heavy truck market will be negatively impacted in the second and third quarter of 2002 by lower freight tonnage, higher insurance costs, declining used truck values, and a likely price increase resulting from new emissions requirements," said Eli Lustgarten, managing director of H.C. Wainwright and Co., New York, N.Y.
Lustgarten added that there were a record 4,200 truck company bankruptcies in 2001, which is likely to impact recovery for the heavy truck market in 2002 as well.
Within the Class 8 sector, the population of 1- to 5-year-old Class 8 vehicles will increase by 4% over the next four years and the population of 6- to 10-year-old Class 8 vehicles will increase by 23%. This pattern has resulted in a glut of unsold new trucks that will take some time to subside, reported Martin Labbe, president and CEO of Martin Labbe Associates, Ormond Beach, Fla.
Labbe further forecasted that Class 8 write-downs will exceed $2.5 billion, used truck prices will be soft until 2004 and trailer demand will remain soft through 2002 due to the glut of equipment.
The NTEA Economic Update gave industry management, marketing and sales personnel an opportunity to get next year's forecast on truck and transportation equipment markets. Attendees also learned if pertinent end use industries are expected to be up or down, and which industries have the best potential for growth.
NTEA will host a full-day Economic Outlook Sept. 19, 2002, at the Hyatt Regency in Dearborn, Mich. To date, the speaker lineup includes Lustgarten; Labbe; Stephen Latin-Kasper, director of market data and research, NTEA (Farmington Hills, MI); Mustafa Mohatarem, chief economist, General Motors; and Brian Bethune, economics and analysis manager, Caterpillar. For more information, contact Stephen Latin-Kasper at (414) 294-3408 or e-mail stevelk@ntea.com.
The NTEA was established in 1964 and represents nearly 1,600 companies that manufacture, distribute, install, sell and repair commercial trucks, truck bodies, truck equipment, trailers and accessories. Buyers of work trucks and the major commercial truck chassis manufacturers also belong to the NTEA.