2022 Heavy-Duty Industry Predictions

Goodbye to 2021 and Welcome to the New Year of 2022!

After a seemingly endless 2020 with the rise of COVID-19, 2021 was a year of reflection, rebuilding, and stabilizing from the economic downturn caused by the pandemic. With coronavirus continuing to affect not only the heavy-duty industry but many other sectors of the world’s economy, how will 2022 pan out?

One upside to the past two years of strife: Companies have gained crisis management skills that may transfer to a “much more tolerable economic climate in 2022,” according to Jim Lucy of EC&M. Despite some setbacks and constraints still impacting the industry, we look to 2022 to be a year of slow return to prosperity and accomplishment because of newly gained skills.

That said, let’s get into our industry predictions for the year moving forward.

Supply Chain

Starting with one of the most prominent issues in every business’ mind, the heavy-duty industry has experienced some unfortunate difficulties and constraints regarding the supply chain over the past year. With the disruptions caused by the pandemic, there have been historic price increases of electrical products that are bound to occur with scarcity. Overall, a major consensus from industry professionals is that these “inflationary pressures will persist through the first half of calendar year 2022 and probably beyond” as stated by Mike Antich of Automotive Fleet. However, these higher prices are expected to be temporary.

Currently, Electrical Marketing’s Electrical Price Index shows that the largest price increases in electrical products include

• pole-line hardware (1%)
• power wire & cable (1%)
• boxes (37%)
• ballasts (36%)
• building wire and cable (3%)

Although the scarcity of these semiconductor-based products manufactured in mostly Asian countries won’t stabilize in the short term, we have high hopes of a return to normal supply chain levels by the end of 2022.

EV for HD Fleets

On a related note, the continuation of electric vehicle parts and products will surely accelerate in the next few years with more demand of electrification, especially in regards to OEMs. According to this Global Marketing Insights research, “the hybrid electric segment is estimated to attain a CAGR of 6.5% till 2027”. With an increasing Compound Annual Growth Rate (CAGR) of environment-friendly operations, demand will increase for automotive battery technologies and hybrid-electric trucks as the industry moves towards going to all-electric fleets.

Many major businesses have already taken large steps towards becoming carbon neutral and sustainable – such as Wal-Mart, Amazon, FedEx, Unilever, Coca-Cola, Johnson Controls, and more – announcing their plans to become completely electric in the next two decades. With this kind of momentum over the next decade, 2022 is a great year for early investment in environmental efforts. Early adoption within the heavy-duty industry to convert with these market trends is beneficial in many ways, including potential for job growth, eliminating air pollution, and lowering maintenance and long-term investment costs for businesses.

New Opportunities

Our final take of industry predictions for the new year includes market opportunities for both the construction and commercial market segments in 2022. According to industry experts of EC&M, home building activity will have a huge turnout in the single-family housing market forecasted at a 15.8% increase in housing starts. With another good year for the U.S. residential construction market, it will definitely be a busy time for home builders.

On the commercial side of things, the construction of warehouses and data centers will be two of the busiest sectors of the market, with a 13% gain in warehouse construction and 2% for data center construction over 2021 numbers. Dodge Data & Analytics research shows that $52.8 billion in construction starts have more than doubled the activity since 2018 for mega-warehouses – especially due to Amazon’s expansion of their massive warehouse/distribution centers at several million square feet per center.

Other commercial sectors to watch: construction increases in hospitals (up 9% to $32.9 billion) and K-12 school facilities in many states (up to 14.49%).

Our Final Take on 2022

With many positives and negatives swirling the heavy-duty industry for the new 2022 year, the market will definitely have an interesting time controlling these increased construction starts with the stated supply chain constraints and price increases. The Senzit team, however, has confidence that by the end of the year, both the construction and commercial industries will experience stabilizing trends and diminish the backward mobility of the last few years. 2022, in essence, is looking positive, and let’s come together to bring this success to fruition.

Resources:

https://www.automotive-fleet.com/10157307/15-predictions-for-the-fleet-market-in-cy-2022

https://www.fleetequipmentmag.com/2021-trucking-market-2022-prediction/

https://www.gminsights.com/industry-analysis/heavy-duty-trucks-market

https://www.ecmweb.com/construction/article/21182101/2022-construction-forecast