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ACT: Challenges to Domestic Economy Raising Risks for Vehicle Manufacturing

According to ACT’s latest release of the North American Commercial Vehicle OUTLOOK, supply-chain constraints kept a lid on the industry’s ability to raise build rates through 2021, and just as the supply of chips was starting to improve, the risk to auto and truck manufacturing supply chains has risen once again.

The N.A. CV OUTLOOK is a robust report that forecasts the future of the industry, looking at the next 1-5 years, with the objective of giving OEMs, Tier 1 and Tier 2 suppliers, and investment firms the information needed to plan accordingly for what is to come. The report provides a complete overview of the North American markets, as well as takes a deep dive into relevant, current market activity to highlight orders, production, and backlogs, shedding light on the forecast. Information included in this report covers forecasts and current market conditions for medium and heavy-duty trucks/tractors, and trailers, the macroeconomies of the US, Canada, and Mexico, publicly-traded carrier information, oil and fuel price impacts, freight and intermodal considerations, and regulatory environment impacts.

According to Kenny Vieth, ACT’s President and Senior Analyst, “Energy markets aside, the global supply of neon, critical for laser lithography in semiconductor manufacturing, is concentrated in a Ukrainian export hub on the Black Sea.” He continued, “While supply-chain risks pile on to what manufacturers have been living with for the past five quarters, the spike in oil prices brings a different set of repercussions for the economy at large.” Vieth added, “Looking beyond the tragedy of the war, the challenge in understanding the impact of the situation on the domestic economy, and by extension commercial vehicles, is how long it will take for the situation to normalize. Implicit in oil prices remaining elevated, new supply-chain constraints are likely to occur, food prices will keep rising, and the corrosive effects of inflation will get materially worse.” 

Vieth noted, “For the guys who buy commercial vehicles, the virus continued to bend consumer spending to goods and away from services in early 2022. Backlogged freight should support activity through 1H’22, but the longer oil prices remain elevated, the more business and consumer dollars will be diverted from the stuff that gets moved by truck.”

ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.

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