LAS VEGAS — The commercial vehicle industry is enjoying a surge in business as the U.S. economy grows, construction projects increase and consumers buy more merchandise.
For now, "trucking is enjoying a very good time," according to Antti Lindstrom, principal analyst, NAFTA medium and heavy trucks, for IHS Markit.
"In my forecast, the total production and sales of trucks are peaking in 2019 for the U.S. and then taking a little breather," he added.
"The economy is the driving force behind commercial vehicles. What the economy does, the trucking market does also," he said, noting that the gross domestic product (GDP) predicts demand for trucks in the U.S.
"GDP is a pretty accurate predictor of the truck market in the U.S. The reason being is that two-thirds of the GDP is determined by private consumption.... Whatever consumers are buying needs to be transported, so therefore there is a truck relationship," he told an audience at the Automotive Aftermarket Products Expo (AAPEX) in Las Vegas in November.
More recently, the American Trucking Associations (ATA) reported its advanced seasonally adjusted For-Hire Truck Tonnage Index rose 3.7 percent in 2017 over 2016, marking the largest annual gain since 2013, when it increased 6.1 percent.
"Despite the decline in December, last year was a solid year for truck tonnage, especially during the second half of 2017," ATA Chief Economist Bob Costello said.
"I remain optimistic for 2018 for a host of reasons, including a pickup in factory activity, better housing construction, solid retail sales and an expected shot in the arm from the new tax law."
Trucking serves as a barometer of the U.S. economy, representing nearly 71 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA.
Meanwhile, the three largest truck manufacturers in the U.S. are predicting an upbeat market going forward.
Daimler A.G., maker of the Freightliner-brand commercial vehicles, increased its market share in Class 6-8 vehicles to 39.8 percent in North America last year on higher unit sales.
"In the United States, the available leading indicators point towards a continuation of the economy's solid upswing," the company said in its annual financial statement.
"In view of stable domestic demand, moderate inflation and low unemployment, the U.S. Federal Reserve is likely to maintain its slightly restrictive monetary policy with only small interest-rate rises. In connection with stimulus from the tax reform passed in late 2017, this could result in overall growth of just above 2.5 percent and thus slight acceleration compared with 2017."
PACCAR Inc., manufacturer of the Kenworth and Peterbilt brands, achieved record sales in 2017, with an increase in Class 8 truck sales in the U.S. and Canada to about 218,000 units.
"Truck demand is increasing due to good economic growth, increased consumer spending, and strong commercial and residential construction, which has resulted in record freight tonnage and high fleet capacity utilization. U.S. and Canada Class 8 truck industry retail sales are expected to increase to a range of 235,000-265,000 trucks in 2018," Gary Moore, PACCAR executive vice president, said in the company's annual financial statement.
Navistar International Corp., maker of the International commercial vehicle brand, reported increased sales in 2017, due primarily to higher volumes in its truck segment.
"Class 8 industry volume declined in 2017, but we anticipate industry volumes to increase in 2018 as general economic and industry-specific indicators are trending well into 2018," the company said in announcing its annual financial results.
"In addition, improved new truck fuel economy along with rising freight demand and rates show the trucking industry remains healthy.
"However, an oversupply of Class 8 used trucks throughout the industry continues to suppress used truck trade-in values, negatively impacting new Class 8 truck sales. The medium truck and school bus markets are expected to maintain the strong demand in 2018."