The West European trailer market is headed for the third-highest level of new trailer registrations ever—surpassed only by 2007 and 2008—but there has been a distinct weakening in the second half of the year and consulting group CLEAR is now forecasting a weaker fourth quarter than was predicted earlier.
Denmark, France, Germany, Italy and Spain are all less buoyant markets than they were assumed to be six months ago.
2016 will represent the peak of the market in this economic cycle. The forecast is now 9.4% growth in the first half and 5.2% in the second half, resulting in 7.4% growth for the year as a whole.
Since 2009, CLEAR has been forecasting that the market would level off in 2017 and then fall in 2018 due to a cyclical downturn.
Many economic forecasts show continuing moderate growth or even strengthening forecasts for West European countries. However the feeling at CLEAR is that any forecast showing everlasting growth should be regarded with suspicion.
In addition, post-Brexit, economists in general agree that the UK economy is headed for difficulties. Of particular interest to the trailer industry is the outlook for UK investment growth, which is now forecast negative for every year from 2016 to 2018. This means that trailer sales will fall.
Within the big seven economies of Western Europe, all except the UK are forecast to have reasonable levels of GDP and business investment in the 2016-17 period. However we are now approaching the tenth anniversary of the GFC which decimated the trailer market in 2009. A cyclical slowdown in 2018 or 2019 is now almost inevitable and the only real questions are how far the market will fall and how long this slowdown will last.
Given the severity of the 2009 recession and its longevity, a trailer market fall of more than 15% is unlikely and a slowdown, not a recession, lasting only 12 to 18 months is probable. CLEAR believes there is a 60% probability of this happening in 2018, a 30% probability in 2019 and 10% in 2020.
Gary Beecroft, director of CLEAR, said, “2017 is expected to result in a small fall in trailer demand but a larger drop in sales in 2018 is now likely.”