Page 3 - Market Outlook Q2 2024

Q2, 2024
3

Economic Overview

COVID Hangover Resulting in Market Adjustment…Continued from Page 1

COVID-19 pandemic and its subsequent normalization. The market 4. High Dealer Inventories
is adjusting from the extraordinary highs of the pandemic years to
more typical demand levels, which is resulting in reduced sales and ACT Research reported that the rapid production increase during the
production volumes. pandemic left many dealers with high inventory levels. As demand has
slowed, these inventories have become a burden, leading to reduced
1. Surge in Demand During the Pandemic new orders as dealers focus on selling existing stock.

During the pandemic, there was an unprecedented increase in the 5. Production Adjustments
demand for trailers due to shifts in consumer behavior, supply chain
disruptions, and the need for additional logistics and storage capacity. Freight Transportation Research also reported that manufacturers
This led to record-high orders and production levels in 2020 and 2021. have had to adjust their production schedules to align with the lower
demand. This has led to reduced production volumes, contributing
2. Market Saturation to the overall decline in sales and orders. The production of trailers
is expected to decrease for most of 2024 before seeing a potential
The surge in trailer production and sales during the pandemic created increase in the final quarter.
market saturation. Many fleets expanded their capacities significantly
to meet the temporary spike in demand. As the market normalized 6. Supply Chain and Cost Pressures
post-pandemic, the need for new trailers diminished because many
companies had already over-expanded their fleets. Ongoing supply chain disruptions and increased costs for materials
and components have also played a role. These pressures have affected
3. Economic Slowdown and Uncertain Economic Outlook production schedules and increased the prices of new trailers, which in
turn has impacted sales, according to ACT Research.
According to Freight Transportation Research, the economic slowdown
and uncertain outlook in 2024 have made fleets cautious about new
investments. Concerns over inflation, rising interest rates, and potential
economic recession have led to tighter capital expenditure budgets,
further reducing the demand for new trailers.