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ACT Research: Commercial Vehicle Industry Faced with Persistent Supply Shortages, Now Facing Omicron Variant

According to ACT’s latest release of the North American Commercial Vehicle Outlook, despite rock-solid demand across the spectrum of forward-looking medium and heavy-duty vehicle market indicators, industry capacity remains range-bound across a broad front of supply-chain constraints, and now Omicron was emerged as a wildcard.

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, “Ripples from pandemic-driven changes to economic relationships are still being felt in the form of constraints that are not localized and are beyond the CV industry’s ability to drive solutions.” He continued, “The explosion in demand for goods (semiconductors, steel) during a period of contagion has led to pandemic-driven failures in a globally reliant web of interrelated manufacturing supply chains. Scaling complex global networks when demand is booming during a period of constrained supply, globally, has proven inadequate to the task pandemic-to-date.”

Vieth added, “The emergence of the Delta variant of COVID exacerbated supply-chain constraints with manufacturing shutdowns across Southeast Asia through the second half of 2021. We now have to ask, ‘What impacts may arise with the new and more highly transmissible Omicron variant on the loose?’ Paradoxically, early reports indicate that while it appears to be more contagious, it also appears to be less deadly.” He concluded, “As with the broader pandemic, the risks would appear in the same asymmetric veins of strengthening demand and elevating supply risks. The period of above-trend goods consumption could extend even as the risk of supply-chain disruptions lingers. If early data showing reduced severity hold, the Omicron variant could accelerate activity, if it reduces broader pandemic risks and aids the recovery in labor supply.”

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