Trucking profitability returning in US

New figures point to good signs for US trucking companies and heavy vehicle manufacturers

By Rob McKay | November 12, 2010

While President Barack Obama’s Democrats gained a bloody nose in the recent elections over the US economy’s performance, the dark clouds might be parting according to an ACT Research projection.

With trucking regarded as a reliable pointer to the health of the economy of one of this country’s major trading partners, the ACT North American Commercial Vehicle Outlook released yesterday makes for heartening reading for international trade generally and the country’s truck-makers in particular.

It found calendar third quarter earnings indicate US trucking company profitability continues to improve even as economic growth moderates and that the value of used trucks had firmed in recent months.

"This combination of factors suggests a growing number of freight hauling fleets will have both the need and the ability to reinvest in equipment," the data, market analysis and forecasting service states.

ACT projects full-year 2010 production of Class 8 heavy road vehicles at about 151,000 units, up 27 percent from a weak 2009, but still well below normal replacement demand.

It forecasts that demand will continue to ramp up for the next two years, with production in 2012 exceeding 300,000 units. The forecast for medium-duty (Classes 5-7) production is more muted, growing 15 percent in 2010 and 14 percent in 2011 due to the slow recovery in that country’s construction and housing sectors.

"Our forecast for 2010 has stayed in a narrow range for the past 15 months as our model predicted a slow economic recovery and heavy-duty demand still well below normal replacement," ACT President and Senior Analyst Kenny Vieth says.

"While headwinds make a full-blown economic recovery unlikely before 2012, recent trends in the transportation and commercial vehicle markets point toward demand for new vehicles building throughout 2011 and 2012."

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