A Conversation with Bob Dieli

Recession or no recession? The question is not if, but WHEN. Now? No…it’s looking more and more like the middle of 2023.

There are headwinds coming from all directions — Europe, China, the Fed, the Midterm Elections…

Europe:

• There are a multitude of issues. First there was Brexit, then the pandemic, then the first round of energy issues and then the pipeline and now Ukraine.

• Of particular concern is energy. How will Europe handle the winter months?

China:

• The pandemic is not over. Shutdowns of entire cities are still going into effect. This impacts both their ability to export and their domestic production.

• This impacts the U.S. because they are on the end of our supply chain.

• Not likely to improve anytime soon.

The Fed:

• You know this story - inflation and interest rates

The Midterm Elections:

• With a plethora of issues upon which to base one’s vote, the outcome is far from certain.

One TEA category has turned RED in Q2

The signals we are getting from our principal leading indicators of economic conditions suggest continued headwinds over the remainder of 2022 and into 2023. Paced by the large decline in Truckable Investment (the one category that is now red), Total Truckable Economic Activity fell in the second quarter of 2022. The pattern we are seeing is consistent with the Boom phase of the business cycle, which is what our forecast model has been telling us to expect.

The largest positive contribution to TEA growth in the second quarter came from Truckable Exports, with all of the components, except petroleum, posting gains.

With the signal from the Enhanced Aggregate Spread still pointing towards slower activity in the trucking economy, together with the recent announcement by the Federal Reserve of their plan to continue to raise interest rates, the prospects for a near term rebound in the TEA growth rate are not good. We remain on alert for the advent of a business cycle peak.

Want more details on TEA? Please contact John Blodgett at john.blodgett@mackayco.com.

HDMA Pulse Webinar on September 28th

MacKay & Company is pleased to team up with the Heavy Duty Manufacturers Association (HDMA) for their September Pulse Webinar. Register here. If you have questions or would like more detail, please let us know. We hope to “see” you there.

DataMac® Mexico 2022

We are excited to launch our DataMac® 2022 Mexico Truck & Bus Study. This Study will be the ninth time MacKay & Company has profiled the Mexican market as a DataMac® aftermarket type study. We will be able to provide eight reference points in time to analyze this market, where there are shifts and changes meriting such an analysis. This information will be included, when pertinent, as a tool to identify trends or highlight significant changes in the aftermarket. In the process, inventory levels, prices, margins, shifts in the customer base and a series of related issues will be evaluated in detail.

When appropriate, MacKay & Company will also compare and contrast the Mexican commercial vehicle aftermarket with the United States and Canada. MacKay & Company has 40 years of U.S. DataMac® historical data to reference.

We have boots on the ground and the work has begun as our research partners in Mexico are surveying fleets. It is not too late to add your components of interest to the list that we are researching. Please reach out to John Blodgett at john.blodgett@mackayco.com to learn more details on the study and to ensure that we include your components in our Study.

HDAD 2023 - Monday, January 16, 2023

Save the date for HDAD 2023!!