ACT Research is predicting that the economy will transition from contraction to growth

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In the release of its Commercial Vehicle Dealer Digest, ACT Research is predicting that the economy will transition from contraction to growth over the course of Q3 and Q4, acknowledging that after the current focus on saving lives will come the challenge of saving livelihoods.

In recognition of the virus’ impact, ACT Research has created an easily accessible COVID-19 MARKET WATCH webpage to track noteworthy high frequency macroeconomic and transportation-specific market indicators, which can be found at https://pages.actresearch.net/covid-19.

The report, which combines ACT’s proprietary data analysis from a wide variety of industry sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report includes a relevant but high-level forecast summary, complete with transportation insights for use by commercial vehicle dealer executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the total US trailer market, used truck sales information, and a review of the US macro economy.

“Clearly the global economy does not have the luxury of waiting a year or two for a vaccine to be developed before the current solution itself becomes the greater risk,” said Kenny Vieth, ACT’s President and Senior Analyst. He continued, “Our forecast anticipates that the US economy, as defined by GDP, will not return to its Q4’19 size until after 2021.”

Vieth elaborated, “In the supply chains that support complex OEM-level assembly operations, from raw materials to finished goods, it is not just about opening one plant, but opening thousands of plants simultaneously, making tens of thousands of parts that go into those assemblies in an orchestrated fashion, all with new layers of safety and testing protocols in place.” He commented further, “It is one thing for the automotive/commercial/off-road industries to get supply chains up and running, it is another entirely to get buyers to market when the economy has so recently cratered and going outside poses an existential risk.”

Vieth explained, “While it is hard to see silver linings presently, we note that this economic downturn was not triggered by the usual supply and demand considerations, bubbles, financial issues, etc., but by a disease. Coupling an otherwise structurally-sound pre-COVID economy, with strong Federal Reserve and Congressional support, and rising pent-up demand, there is a case to be made that the economy will respond strongly into 2021.” He concluded, “We believe that the maturing millennials will be the key to pushing the economy forward as they resume their transition to marriage, kids, and mortgages.”