2016 will likely represent the peak of the western European trailer market in the current economic cycle, according to a new forecast by UK consulting firm, Clear.
“In 2016 we are headed for the third highest level of new trailer registrations ever, surpassed only by the figures for 2007 and 2008. This might look like good news for the trailer industry – and in fact it is,” explained Clear Director, Gary Beecroft.
“However, there, there has been a distinct weakening of the market in the second half of the year [as] Denmark, France, Germany, Italy and Spain all proved less buoyant than they were assumed to be six months ago.”
With central Europe weakening, Beecroft said Clear was now forecasting a weaker fourth quarter than was predicted earlier in 2016.
“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.”
Overall, Beecroft explained the market would level off in 2017 and the fall in 2018 due to a cyclical downturn.
“We are now approaching the tenth anniversary of the GFC (Global Financial Crisis, ed.), 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.”
Beecroft said a trailer market fall of more than 15 per cent would be “unlikely” and a slowdown, not a recession, lasting only 12 to 18 months is still 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.”
Beecroft added that the UK in particular could be headed for difficulties after the decision to leave the European Union. He said the outlook for UK investment growth was negative for every year from 2016 to 2018, which means trailer sales are set to fall.