NTEA Economist: Truck Market Recession to be Short, and Moderate

Fleet demand and strong order backlogs bode well for the transportation equipment markets in 2023, but supply chain and inflation concerns remain, according to the NTEA forecast.

While economic forecasts for 2023 have grown increasingly pessimistic in recent months, there’s still some good news: The downturn will not be steep, nor long-lived, according to the group.

“We tend to think really bad things when we hear the word ‘recession,’ but, in this case, what’s anticipated is a very shallow and very short recession expected in 2023,” explained Steve Latin-Kasper, NTEA senior director of market data and research. “Hopefully, it’s the final part of the rebalancing act that we’ve been engaged in since the pandemic hit back in March 2020.”

In the Jan. 11 online presentation, “Understanding market dynamics influencing the work truck industry in 2023,” Latin-Kasper noted that economists are divided on the timing, with some forecasting the downturn will hit in the spring, while others see a summer slowdown. Regardless, the rebound will follow quickly.

Inflation remains a key economic factor, which Latin-Kasper noted is trending downward—“and that’s a good thing”—but remains high.

According to monthly chassis statistics from NTEA, the association for the work truck industry, sales for all classes will be up in 2023, although growth in previously hot markets such as Classes 2, 6, and 8 will moderate to lower single digits.

“If it wasn’t for a whole bunch of other things going on that have to do with supply chain disruptions and chassis availability, primarily, we would have had a situation where profit margins were being squeezed badly and having an impact on overall demand from the fleets for trucks and truck equipment,” he said. “That’s not happening because supplies are still so far behind demand—so this particular situation is not as impactful as it might have been otherwise.”

Full story from Fleet Owner, here.

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