Depressed consumer and business spending and other elements of economic softness likely will keep Class 8 sales under 200,000 in 2008, a panel of analysts generally predicted at the Heavy Duty Manufacturers Association’s annual Heavy Duty Dialogue, held last week in Las Vegas, Nev. How far below 200,000 depends on just how weak the U.S. economy is in 2008.
Freight demand will remain sluggish in large part due to decelerating consumer spending owing to inflation, loss of wealth because of declining housing prices, slower employment growth and tighter credit, said Chris Brady, principal of Commercial Motor Vehicle Consulting. Brady expects a gradual upturn in freight in the second half of 2008.
Martin Labbe, president of Martin Labbe Associates, projected Class 8 sales of 178,300 in 2008, adding that his numbers presume there is not a recession. If a broad-based recession does occur – or is occurring – those numbers will be significantly worse, Labbe suggested.
Stu MacKay, president of MacKay & Co., noted that his projections of Class 8 sales at the Heavy Duty Dialogue in January 2006 proved right on the money for 2006 and 2007, but he believes he will be far off on his projection for about 220,000 Class 8 sales in 2008. “It won’t even be close to that,” MacKay said, adding that he mostly subscribes to Labbe’s thinking that sales will come in at about 180,000 to 190,000 trucks. MacKay estimates that the crash in single-family home sales alone has cost the trucking industry about 8 million truckloads.
Kenny Vieth, a partner in A.C.T. Research, expects continued weakness in 2008 that could spill over into 2009. Vieth suggested that a pre-buy leading up to 2010 might not meet expectations because fleets will look to push off the projected 1-cent-per-mile increase in costs that 2010 trucks would represent.