Trucking Economy May Land Softly, Mack’s Randall Says
AUSTIN, Texas — Mack Trucks North America President Jonathan Randall on Oct. 16 expressed hope the economy is heading for a “soft landing” instead of a more severe falloff.
“I’m going to talk about the economy, at least from a Mack perspective, and what we’re seeing and hearing out there,” Randall said. “This is not news to anybody as far as what’s going on with [gross domestic product], either year-to-date or quarter-to-quarter. But what we’re forecasting or what we’re seeing is that there seems to be better odds for a soft landing whenever that landing may come.”
Randall made his comments during a news conference held at American Trucking Associations’ Management Conference & Exhibition. His anticipation would mean a cyclical slowdown in economic growth that avoids a recession. He still tempered his remarks by pointing to the persistent economic uncertainty.
“So, whatever actions and activities are happening are getting us to a point where we think, again, we’re going to see a little bit of a soft landing,” Randall said. “This is where I talk about those conflicting metrics. You see unemployment very low, but you see inflation high, yet you see goods spending increasing. These dynamics playing off of each other are always very interesting.”
Randall added public projects such as roadwork and commercial construction remain strong even as housing starts slow down. He noted those markets continue to bolster truck order intakes for his company.
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“There’s housing starts, and of course the interest rates are driving some softening there and some low buyer traffic,” Randall said. “But the interesting thing is when we talk about construction, and particularly those segments where Mack has a strong position, we’re not really seeing any softening there at all.”
Randall noted industrial production is keeping pace while contract spending has been driving the order books. Mack opened its order books in August and has since seen robust intake. Randall has noticed softening or hesitancy in some over-the-road and large fleet business but indicated that the core segments are performing well overall.
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“Not that there’s not need, not that there’s not demand, but there’s some hesitancy in maybe placing some of those orders from a replacement standpoint,” Randall said. “We’re feeling that a little bit, as is our dealers.”
Mack expects to close out the year with 330,000 heavy-duty trucks sold in North America compared with 284,000 in 2022. The increase also is happening amid a slight shift in segment sales. Randall noted that last year the longhaul segment accounted for 52% of total registrations. But year-to-date, that segment is at 49.1%. He noted the market usually hovers around 50%.
“A couple of years ago, that number was 48%,” Randall said. “When we had the real trial, that number was about 42% longhaul. We’re not going to go down to 42% longhaul, but you should see probably a little bit of a pullback.
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“What that means is those other segments are going to strengthen. You’re going to see the straight trucks strengthen from where it is today, you’ll probably see day cabs strengthen from where it is today.”
Randall also anticipates the construction segment will be a larger percentage of overall registration in the North American market, saying that order books have been playing out as expected in that regard. He also indicated that production for the MD Electric begins this quarter as the company makes continued investments toward sustainability.
“Still, an incredibly strong market,” Randall said. “Anticipation is we’ll see a pullback from that. To what extent, we really haven’t publicly stated yet. But the forecast says that any pullback that we see is really going to be in that longhaul business.”
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