CLEAR International has just issued its latest forecast for the West European Trailer Market.
In 2017 trailer registrations reached over 190,000 in Western Europe which is the third highest level of demand ever recorded – surpassed only in 2007 and 2008, just before the 2009 crash caused by the GFC.
In 2017 the demand for trailers increased in the first half of the year by 5.7% but only 2.5% in the second half. Overall however, 2017 saw 4.2% increase in registrations.
Since mid-2017 there has been a distinct improvement in the outlook for most, if not all, West European economies. As a consequence, the forecast of a slowdown in demand for trailers in the region during 2018 has moderated again but it has not disappeared.
Instead of demand dropping by approximately 9% in 2018 a decline in demand of 4% is now forecast, followed by a further drop in 2019 leading to a total shrinking of the market by 12% over the two years.
Given that the economic outlook for Europe continues to improve, why is the trailer market forecast down in 2018/19 ? The catch up demand that has been pushing the market is now over. The trailer parc is fully replenished despite the fact that road transport demand has yet to return to 2006 (pre-GFC) levels. Furthermore it is nine years since the decimation of the trailer market in 2009 and the market has never gone ten years without a slowdown. All these factors point to a fall in demand for new trailers. Fortunately for the industry, the fall will be relatively modest and short-lived.
Following the decline in demand in 2018/19 there will be a return to growth in trailer sales in 2020/21. Furthermore, as we move into the 2020s it is likely that demand for commercial vehicles will follow an upward path so that by mid-decade record levels will be approached once again.
The outcome of these changes is that 16,200 trailers have been added to the forecast during the 2018-22 period, spread evenly over the five years. Most of these extra trailers added to the forecast will be sold in Denmark, Germany, France, the Netherlands and Belgium, but with Spain, Italy and the UK performing less well than expected in 2017 and beyond.
The UK market is currently receding from the heady level of trailer demand seen in 2015/16 and as a result will have the unique distinction of shrinking every year from 2016 to 2019. Despite this trend, the UK trailer demand will fall below 20,000 trailers only in 2019, which is still above the typical level of the market before the GFC.
The brexit effect, which has already dropped the UK average investment growth forecast below 1% for the 2016-18 period, will result in uncertainty and low business confidence during the run up to the UK leaving the EU in 2019. However when (if) the brexit terms have been settled there will be a resumption of trailer market growth.
