US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

RVs: the New Mobile Office & Socially Distant Travel Option

RV industry leader Thor Industries recently reopened manufacturing facilities after shutting down due to shelter-in-place regulations in mid-March to an enthusiastic market. Key factors driving sales gains in this market as dealers reopen include:

  • The idea of “work from home” can be moved to “work from anywhere” as many office jobs can be done in any location with an internet connection and RVs can act as mobile offices.
  • Essential workers can use RVs to avoid cross contamination between work and their homes.
  • RVs allow travelers to do socially distant travel by avoiding high density areas such as airports and hotels and gives them greater control of their environment and possible exposures.
  • Recreation dollars are being reallocated – if consumers cannot go to traditional vacation destinations, children’s camps are canceled, and sporting events are not an option, the 20% down payment no longer seems like an obstacle to ownership.

Although RV owners have traditionally included families and retirees, younger people – including younger couples without children – have increasingly accounted for a greater share of RV owners. These trends are likely to increase the participation by this demographic.

For more information, see The Freedonia Group’s report Recreational Vehicles. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Covid-19    

North American Truck Sales Hit Unprecedented Lows

A softening of truck orders in 2019 – which followed a record spike in 2018, when the strength of the US economy and changes to business taxes encouraged equipment investment – has now been compounded by the COVID-19 pandemic in 2020. While orders increased in January 2020, orders began to fall again in February until they unprecedented lows in April at just 4,000 vehicles, according to an article published by the Wall Street Journal. Most traditional markets for trucks have experienced severe turmoil since March, causing a dramatic decline in orders for the models needed to transport materials and goods.

The COVID 19 pandemic has caused weakness throughout much of the North American economy, and fewer trucks are needed on the road right now as there are fewer goods being produced and distributed. Even as states reopen manufacturing plants and employees return to work, the uncertainty regarding how long the economy will be depressed will likely reduce order rates in the coming months as well.

Further complicating matters, it is not clear how many existing orders for heavy trucks in North America will be cancelled in coming months as companies go out of business and others reduce production and delay plant openings.

While 2020 is shaping up to be a year or record lows, the North American heavy truck industry will increasingly look to 2021 and beyond for new opportunities as it weathers the COVID-19 pandemic.

For more information, see The Freedonia Group’s Global Diesel Engines and North American Medium- and Heavy-Duty Truck Aftermarket studies as well as our Medium- & Heavy-Duty Trucks & Buses: United States and Global Medium- & Heavy-Duty Trucks & Buses Freedonia Focus reports. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Covid-19    

US Automotive Industry & Supply Chains Temporarily Reshaped by COVID-19

US automobile manufacturers have quickly altered their operations due to COVID-19. Many firms adjusted to slumping new car sales by slowing down assembly lines or ceasing production altogether, while other manufacturers have worked to re-tool production to make ventilators and other needed medical equipment. This contraction of automobile production activity has affected hundreds of companies across the US.

Suppliers of automobile parts and components have been hard hit as orders for their products have dried up. Given that – in many cases – these suppliers rely on subcontractors with the parts needed to put together steering, axle, chassis, and the other assemblies, the shutdown of a single plant can ripple down to multiple other businesses.

Furthermore, this drop in orders will affect those companies that provide raw materials to the industry. Getting beyond the more obvious metals used to produce modern automobiles, such as steel and aluminum, a wide range of other inputs is also required, such as plastic resins, rubber (not only for tires but for acoustical and vibration control), composites (e.g., fiberglass and carbon fibers), coated fabrics (for upholstery, headlining, air bags, etc.), and glass.

Some of those materials – including plastics and coated fabrics – can be reposed into needed personal protective equipment and some plastics, gaskets, and other items will be used for ventilators. However, a prolonged shutdown of the nation’s automobile production capacity would still have dire effects cascading through to parts suppliers and firms that provide key raw materials.

For more information, see The Freedonia Group’s extensive catalog of off-the-shelf research. Each report includes analysis of competitive strategies, including joint ventures and merger and acquisition activity. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Covid-19