The market for Class 8 trucks is expected to be 260,000 units in 2016, down moderately from the 320,000 that were sold last year.
FTR expects things to edge up slightly in 2017, with sales reaching 262,000 trucks.
The forecast for production is weaker than would think because some inventory needs to be worked off, according to Eric Starks.
“The fundamentals have not materially shifted,” Starks said. “We expect a decent market--at or slightly above replacement.”
Freight demand continues to be in a growth mode for trucking. But things have flattened out.
“It has taken us 10 years to get back to where we were from a freight standpoint,” Starks said. “Capacity utilization is just above 90% and just above the replacement rate. This suggests that we will need more equipment. Demand should be relatively stable as we move through 2016."
Regulations could stimulate market to exceed normal demand, and a recession could cause fleets to reduce purchase plans.
FTR created its Class 8 forecast, but also sought input from others. Thirty-two companies responded.
On the positive side:
• All responses for 2016 and 2017 appear to be at or above replacement demand.
• The industry representative contributing to the consensus forecast did not reflect concern about an economic recession.
• A very stable market expected for the next two years.
Concerns:
• Very little expectation that the markets will recover over the next two years.
• Larger variance in expectations for production on a quarterly basis as we enter the second half of 2016.
