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HDMA: Heavy duty suppliers report positive outlook after Q1

Record positive levels for fundamentals lead to 'problems of prosperity,' according to quarterly survey of heavy-duty vehicle suppliers.

The Heavy Duty Manufacturers Association reported a seventh consecutive quarter of improvement in the 12-month business outlook and growing concern over rising material costs in its quarterly supplier barometer. The association completed its survey of 70 member companies for the first-quarter HDMA Supplier Barometer last week.

The quarterly report provides a detailed, up-to-the-minute perspective on how HDMA members view current business conditions in a wide-ranging set of data points, all based on responses from executives in the HDMA supplier member base.

The first-quarter barometer saw the 12-month business outlook post a seventh consecutive quarter of improvement and sixth quarter in positive territory, reaching 77-pecent positive.

Both sales and prices have shown similar, if more moderate, upward trajectories, and the business-planning trio of hiring, production capacity and inventory levels are now in record positive territory.

The “problems of prosperity” that started to emerge in the middle of 2017 have solidified as suppliers continue to face difficulties with forecast accuracy, demand volatility and, soaring to the top of the list of concerns, raw-material prices.

The sudden rise of material costs is likely of greater concern as a result of proposed tariffs on steel and aluminum, and the far‐reaching impact they will have on the supplier community, according to the report.

The proposed tariffs was the most mentioned issue of concern outside those on the survey list.

The outlook for all subsectors is positive, with on‐highway OEM production leading the way.

Production forecasts show why many are expecting an excellent year, the report concludes.

 

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