Truck Parts and Service | Heavy Duty Trucking, Aftermarket, Service Info
Issue link: http://read.dmtmag.com/i/848272
4 A s I write this column, we just finished the longest day of the year (I mean daylight hours, not a bad day, which doesn't seem to want to end) June 21. Not quite the midpoint of the year, but close, so maybe it is a good time to review what we at MacKay & Company know so far about the aftermarket for 2017. I do understand that by the time you are reading this it is likely August and Jordan Spieth has already won the British Open. Let's start with our Fleet Utiliza- tion Index. Each quarter we measure fleet vehicle utilization rates for more than 700 fleets of various sizes and vocations. Obviously, fleets' equip- ment usage has a direct impact on the aftermarket for parts and service. First quarter utilization came in at a record high and the forecast by the fleets for the second and third quarters was also very strong. We also have an Aftermarket Index of component suppliers' sales to OES and independent channels. Prelimi- nary numbers through May have the parts sales for these participants up 3.5 percent year-to-date compared to last year. Canada is up 7.8 percent. Sales to independent channels are outperform- ing OES in both markets. Both markets (U.S. and Canada) were down last year compared to 2015. Commercial break: If you would like to join our Index, let me know. Now back to the column. Monthly, we also survey several truck dealers and independent parts distributors each month about their aftermarket parts sales. Our survey respondents in May for both channels were up between 4 percent and 5 per- cent year-to-date compared to 2016. Bob Dieli, our economist and frequent contributor to this column, has a short-term economic outlook tool called Enhanced Aggregate Spread (EAS). I won't enlighten or bore you (depending on interest level for economic forecasting) on the details now, but basically Bob takes four real economic measurements, combines them in an Index and pushes it out nine months — turns out to be a good short term indicator of economic activity. At present, it is showing positive economic activity out into the first quarter of 2018. EAS is also a good leading indicator for our measurement of trucking economy called Truckable Economic Activity (TEA). Currently all sectors of TEA are at or above levels measured last year. Retail sales are forecast to be down this year, but while retail sales can be an indication of economic health, they don't truly impact the aftermarket of the current year. Our forecast for 2017 aftermarket in January of this year was for the market to be up 1.5 percent over 2016. At pres- ent, that looks light, but time will tell. We do complete our major update and forecast in July, so stay tuned. In summary, most indications are positive and the short-term outlook is positive, business and consumer confidence is good and forecast capital spending by corporations is expected to be up. Now is the time to take advantage of a good market and make hay (or better yet money). Turn off the radio and TV talking heads (and twitter account if you have one) and focus on what you can control — your business. T R U C K P A R T S & S E R V I C E | J u l y 2 0 1 7 Editorial | MacKay & Company Now is the time to take advantage of a good market and make hay John Blodgett has worked for MacKay & Company for more than 20 years and is currently vice president of sales and marketing, responsible for client contact for single and multi-client projects. He can be reached at john.blodgett@mackayco.com. Longest Day: Good time to look at the long and the short of the aftermarket By John Blodgett MacKay & Company