Trailer market 5-year forecast downgraded

With Germany the only market out of the Big 7 economies that will have positive GDP in 2012, this deterioration has reportedly fed directly into slowing trailer sales. In the first quarter of 2012 trailer demand was up 0.4 per cent, but it will finish the year down 6.3 per cent. Nevertheless 77 per cent of goods in Europe are moved by road and most of that proportion is transported on a trailer, making the progress of this sector of significant interest.

According to consulting group Clear, which has been forecasting a slowdown in 2012 for several years, this has not come as a surprise. However, in addition to these earlier predictions turning out to be right, the consultants are now predicting that the economic outlook to 2016 will be worse than expected every year for the next four years. And this will inevitably have an impact on long term trailer demand.

GDP growth for the region is forecast at only 0.2 per cent in 2013, but will average 1.5 per cent in the three subsequent years when investment growth will average 3.2 per cent.  Therefore, there will be growth in trailer demand in the second half of 2013, followed by more solid growth through to 2016.

The report includes data on the demand for road transport in the Big 7 West European economies, which in 2011 languished at 11.6 per cent below the level of 2006 (measured in tonne-km).  The consequence of this fact is that a smaller trailer parc (fleet size) can meet the reduced demand for transport. Hence the parc will fall in four out of five years from 2009 to 2013.

Against this gloomy possibility, it can be argued that the trailer parc has been falling in almost all West European countries.  This means that the number of trailers available is more closely aligned to the demand for transport that exists. If transport companies do not buy new trailers they must pay the increased maintenance costs of servicing an aging fleet, which eventually becomes economically untenable.

The most likely scenario is that, after the hiatus of 2012 and the first half of 2013, we will be into a more stable period of trailer demand growth and parc renewal.  From 2013 to 2016 trailer demand will grow in every country in almost every year.  However, trailer parc growth will average only 0.3 per cent per annum, as the increase in trailer demand will be insufficient to grow the parc any faster.

Gary Beecroft of Clear stated that “By this time next year the worst of the current dip in trailer demand will be behind us, but a return to the trailer demand levels of 2007/8 in unlikely in this decade.”