According to ACT Research’s (ACT) latest release of the North American Commercial Vehicle OUTLOOK, yellow lights continue to flash for the U.S. economy, and by extension for the North American commercial vehicle industry.

“While the outlook has less of an orange tinge, sufficient caution flags remain to keep the yellow light burning regarding the near to mid-term economic outlook,” said Kenny Vieth, ACT’s President and Senior Analyst. “While we’ve seen improvement in petroleum prices, equity valuations and a monetary policy pause, we remain cautious regarding indicators like a flat yield curve, quantitative tightening, potential fallout from tariffs and trade wars, as well as the global economic slowdown.”

Regarding heavy vehicle demand, Vieth noted, “ACT’s Tractor Dashboard posted a third consecutive negative five reading in December, suggesting demand will increasingly come under pressure in the first half of 2019.”

Despite Vieth’s cautious tenor, he noted the heavy commercial vehicle market continues to benefit from a still-broad spectrum of supply and demand-side triggers.

“The rolling-over of ACT’s Dashboard guidance suggests order weakness will transition from today’s ‘too much backlog’ to an equipment supply-freight demand imbalance in the near future.”

Regarding ACT’s medium duty forecasts, Vieth said, “Preliminary January net orders were in sync with the current trend, with average orders per month for the past six months moderating from the strong upward pressure they exerted on the forecast in the first half of 2018.”