The latest figures suggest that in 2016 we had the third highest level of new trailer registrations ever, surpassed only by the figures for 2007 and 2008. However, there is also “a distinct weakening of the market in the second half of the year” according to CLEAR analysts who suggest the market is now forecasting a weaker fourth quarter than was predicted earlier in 2016. Denmark, France, Germany, Italy and Spain are all less buoyant markets than they were assumed to be six months ago.
Therefore 2016 will represent the peak of the market in this economic cycle. The forecast is now 9.4 per cent growth in the first half and 5.2 per cent in the second half resulting in 7.4 per cent growth for the year as a whole.
Since 2009 CLEAR has been forecasting that the market would level off in 2017 and the fall in 2018 due to a cyclical downturn. The latest details means CLEAR is sticking to this analysis and it may be that the trailer market’s relative weakness in the fourth quarter of 2016 is the first indicator of this sequence of events.
There are of course other possible outcomes. For example, post brexit, economists in general agree that the UK economy is headed for difficulties. Of particular interest to the trailer industry is the outlook for UK investment growth which is now forecast negative for every year from 2016 to 2018. This means that trailer sales will fall.
Within the big 7 economies of Western Europe, all except the UK are forecast to have reasonable levels of GDP and business investment in the 2016/17 period. However we are now approaching the tenth anniversary of the global financial crisis (GFC) which decimated the trailer market in 2009. A cyclical slowdown in 2018 or 2019 is now almost inevitable and the only real questions are how far the market will fall and how long this slowdown will last.
Given the severity of the 2009 recession and its longevity, a trailer market fall of more than 15 per cent is unlikely and a slowdown, not a recession, lasting only 12 to 18 months is probable. CLEAR believes there is a 60 per cent probability of this happening in 2018, a 30 per cent probability in 2019 and 10 per cent in 2020.
In the latest report the slowdown is shown as occurring in 2018 and it is immediately followed by a return to growth in 2019-20.
Gary Beecroft, Director of CLEAR said “2017 is expected to result in a small fall in trailer demand but a larger drop in sales in 2018 is now likely.”