It’s going to get better in the used truck market in 2024. Eventually.
At least that’s how ACT Research anticipates the market evolving over the next 12 months, said Vice President Steve Tam Thursday during his annual presentation at the Used Truck Association (UTA) Convention in San Antonio.
After last year’s gloomy remarks and the continued softening of the market since, Tam tried to be positive where possible Thursday. Used truck prices keep falling and that’s not likely to reverse course soon, Tam said, but the trucking industry’s business cycle is nearing the end of its low point. There are indicators that freight volumes and rates will begin rising again next year and when that happens, it will eventually pull the new and used truck markets up as well.
“Everything right now seems to be poised at the bottom of the trough,” he said. “We think freight rates will begin to start rising again in the spring, first in the spot market, and beginning in the second quarter [data] will start to be positive in year over year assessments.”
Tam said ACT Research ties that prediction to a number of economic factors.
He said consumer spending and services are currently driving GDP growth, which is how U.S. third quarter numbers can be so strong while freight volumes stagnate. Tam said the U.S. Freight Composite Index is likely to close 2023 down 0.2% but rise by nearly 2.0% the following two years. He added the increase next year will be driven by business investment. As the economy gets further away from the pandemic recession and its inflationary recovery, interest rates will stabilize and businesses will have more confidence to invest.
ACT Research says the trucking industry follows a classic cycle and is currently approaching its trough as it bottoms out.
