Uncertainty in economy and policies poses risks to commercial vehicle sector – Power Progress
The conclusion of 2024 saw a robust performance in Class 8 orders, with a booking rate of 357,000 on a seasonal basis. However, the initial months of 2025 have been overshadowed by uncertainty surrounding trade and economic policies, leading to a disruption in business planning. This observation was highlighted in the latest edition of the North American Commercial Vehicle OUTLOOK, a comprehensive forecast of commercial vehicle demand, market analysis, and forecasts over the next five years by ACT Research, a prominent source of industry data and insights for truck, trailer, and bus markets in North America and China.
ACT’s President and Senior Analyst, Kenny Vieth, raised pertinent questions about the causes of the decline in orders. He noted a 34% year-on-year drop in preliminary Class 8 orders in February, amounting to 18,300 units. Seasonally adjusted figures revealed a 28% decrease from January, with orders standing at 16,700 units and a SAAR of 200,000 units – the lowest in nearly two years. Vieth drew attention to the impact of tariffs on corporate decision-making processes and economic expectations for the year, attributing part of the slowdown to policy uncertainties affecting the U.S. Class 8 market indicators such as freight volumes, freight rates, consumer spending, and sentiment.
Looking ahead, Vieth anticipated a potential shift in production back to the U.S. as a response to tariffs, prompting the industry to increase inventory levels before tariffs take full effect. While ACT revised its forecasts and downgraded expectations for 2025, Vieth acknowledged a temporary boost in industry activity due to tariffs driving businesses to expedite their operations. However, he cautioned that the acceleration in activity may lead to future consequences, emphasizing that there are inherent risks associated with pulling activity forward.
Overall, the commercial vehicle industry in North America is navigating through a period of flux, grappling with the repercussions of economic uncertainties and trade policies. As stakeholders in the market adjust their strategies in response to these challenges, it remains to be seen how the industry will adapt to the changing landscape and what the long-term implications of these developments will be on commercial vehicle demand and market dynamics.
