Analysts Predict Truck Part Prices to Rise Slower
On January 16th there was an event called the Heavy Duty Aftermarket Dialogue (HDAD) conference in Texas. HDAD describes itself on its website as, “an outlook conference specifically directed toward the heavy duty aftermarket supplier industry.” One of the presenters there was MacKay & Company, which is similar to FTR and ACT Research but focusing on truck parts rather than the trucks themselves. They gave a presentation of their findings from 1990 to 2022, and say they have reasonable belief that the aftermarket is about to cool down.
Upon an initial look of what MacKay & Company presented, one may believe that aftermarket truck parts decreased in price. This is not the case, and has only happened twice since they started recording changes in average prices: 2009 and a small blip in 2016.
Instead, the rate at which it increases will slow down, similar to a truck hitting the brakes, but not shifting into reverse. This decrease in increase is called disinflation.
With that in mind, here is what MacKay & Company stated at the conference:
- On average, aftermarket prices increased by 1.9% each year from 1990 to 2020. Imagine a 1990 carburetor bought that year cost $400. In 2020, a 2020 model would cost $703.53.
- This is due in part to inflation, but also various other factors such as technological improvements.
- Interestingly enough, this is lower than what the Bureau of Labor Statistics (BLS) says inflation was for the period: 2.5%. In that regard, real prices dropped.
- 2021 saw a 6.7% increase and 2022 saw a record 10.2% increase. Both of these years were higher than the BLS stated inflation rate.
- MacKay & Company expects 2023 to have a 3.5% price increase, with a 2.0% increase for every year after that.
With current market trends, the global supply chain woes that have been plaguing the trucking industry for roughly the previous two years may finally be coming to an end. Of course, this is all speculation, and things may change if we have another global event. Nobody has a crystal ball.
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