CLEAR International updates its forecasts for the European Truck Trailer Market
Since the report in February the threat posed by covid-19 has declined but the war in Ukraine and the cost of energy plus general price inflation have replaced the virus as the principal threats to growth in trailer demand.
Economic forecasts for countries in Western Europe have already taken a hit. As a result the forecasts for trailer demand in 2022 and 2023 have been scaled back.
Anecdotal evidence suggests that some trailer manufacturers had full order books for trailers for the whole of 2022 by early in the year. Companies that are in this situation may be cushioned against current events until later in the year. However, economic forecasts for 2023 have in general been downgraded.
Increased costs caused by high inflation combined with continued difficulty in sourcing some vehicle parts are making manufacturing difficult. CLEAR has heard of fields full of partly finished trailers waiting for components that are in short supply. A European war plus a difficult economic situation cannot help but dent business confidence and a reduce companies’ willingness to invest in new transport equipment.
CLEAR envisages 1.9% growth of trailer demand in 2022 – less than was forecast only a few months ago. Considering the issues faced by the industry this is would be a reasonable outcome. However, a slight fall in demand is probable in 2023. Subsequent growth in the forecast period will eventually bring the sales level back to that of 2019, but not until 2025.
Production of trailers was at the third highest level on record in 2018 (though well short of the 2007 figure). The total fall in registrations from 2018 to 2020 was 23% and the fall in production was 32%, partly due to a large fall in German trailer exports.
There will be a decline in exports of trailers to Eastern Europe affecting both 2022 and probably 2023 as well. This will have a disproportionate impact on German trailer builders who are the largest exporters. During the forecast period production will recover to the level of 2019.
The trailer parc (fleet size) grew by only 0.3% in 2020. It will grow by 1% on average in each of the three years that follow.
The West European trade in goods data for 2021 gave another surprise. Trade was down only 3% in 2020q4 (measured in €uros). This was despite difficulties in moving goods between the UK and the EU as a result of brexit. For the year 2020 trade was down 10%. However, trade in 2021q4 set a new record as did the figures for 2022q1, when there was a surprisingly large jump leading to an increase of 27% year on year – possibly related to the cost of gas imports.
The forecast period from 2022 to 2026 will be a time of declining replacement demand for trailers as a result of low trailer registrations in the 2009 to 2014 period. Therefore, the forecast growth in trailer demand will call for significant levels of investment in new trailers over and above the replacement level.
The new report outlines when, where and how quickly the trailer market will develop through to 2026.