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North American Economy Should Be Strong in 2022 But Grow at Slower Pace
Yosyf Sheremeta SUMMARY. 2021 was a year of big hopes for economic recovery and pandemic management, and, overall, the economic rebound was strong. Looking at the state of the economy in general, and the key economic indicators such as GDP, interest rates, employment levels, etc., the North America market finished the year on a very high note. At the same time, development of new pandemic variants as well as ongoing issues with supply chains have led to manufacturing issues.
The second half of 2021 brought steady economic activities and strong economic recovery. Despite this strong performance, many existing and new challenges were seen. Problems from pandemic-related supply chain disruptions, logistics backlogs, and semiconductor shortages to new virus variations and labor market issues have contributed to slower growth in Q4 2021 than during the first half of last year.
Let’s break it down. The “Great Resignation” means companies must make themselves more attractive to new hires, and it provides those workers who remain more leverage to change corporate cultures from the inside.
With help of government support and targeted fiscal policies, the US economy showed a strong comeback in 2021. Furthermore, the growth trajectory is well positioned to continue to expand into the next few years, however, at much slower pace, than in 2021.
At the same time, there are many reasons for us to be optimistic about this trend. Our positive outlook is based on the reviews of key economic indicators, including GDP, unemployment, and inflation. In our previous forecasts, we discussed recovery trends for the post-pandemic period, and called for a return of demand for most markets in 2021. Last year, we witnessed a strong level of activities and an economic rebound for
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North American Rollers 2021 Production: 6,245 Units
DATAPOINT
6,245 units is the estimate by Power Systems Research of the number of rollers to be produced in North America (U.S., Canada and Mexico) during 2021.
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
Market Share: With 48.5% of total units produced, U.S. based Wacker Neuson leads in production of Rollers in North America. In second position is Caterpillar’s combined plant totals of 21%; third, is Volvo Construction with 15.5%.
Export: Collectively, up to 50% worldwide.
Trends: In 2020, production of Rollers in North America dropped 31.5%, but production is expected to rebound 16% in 2021 over 2020. The decline in 2020 is solely based on COVID-19 related factors that impacted the global supply chain. There are material shortages (parts/supplies), shipping issues (moving goods is slow paced), material prices increased and workforce matters (due to company shutdowns or can’t find workers).
With supply chain problems gradually being resolved, the 2021 increase is also attributed to the launching and demand for new, more versatile products, along with the stabilization of the overall economy, mostly regarding the housing/construction markets. The demand for rental machinery is also on the rise.
Many new models are boasting increased fuel efficiency that are desirable to operate. Tandem drum vibratory rollers account for nearly half of all compactors produced and sold each year that range from 5-8 metric tons. Expect the production of rollers in NA to increase an additional 10% by 2025. PSR
Carol Turner, is Senior Analyst, Global Operations, for Power Systems Research
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UAZ Patriot SUV Collects US$ 3.8 Million in Pre-orders in USA
Maxim Sakov The North-American premiere of the UAZ Patriot SUV took place recently at the Los Angeles international Autosalon. The exclusive importer of the vehicle is Bremach Inc., a California company. The Russian car has its own name, Bremach 4×4. The name Taos, announced earlier, was rejected to avoid the conflict with Volkswagen, which has had a product with this name since 2020.
The Patriot was introduced in two versions–standard and off-road extreme. Both models are equipped with 2.7 gasoline engine ZMZ Pro of 149 hp and a six-gear automatic transmission Punch Powerglide 6L50, connected all-wheel drive. Standard version costs US$ 26,405 in USA.
According to Bremach, in the first 24 hours after the introduction, they received deposits totaling US$ 3.8 million. How many cars were ordered, was not disclosed, but the minimum deposit is US$ 100.
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DATAPOINT: North American Golf Cars 2021 Production: 56,200 Units
56,200 units is the estimate by Power Systems Research of the number of golf cars to be produced in North America during 2021. In this report, we consider North America to be the United States.
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
Market Share: With 42% of total units produced, Yamaha Motor leads in production of gas-powered Golf Cars in the United States. In second position is Textron (EZGO) with 32%; third, is Club car with 26%.
Worldwide Distribution: Collectively, up to 20% worldwide.
Trends: In 2020, US production of Golf Cars dropped 18%. Production is expected to decrease another 2% from in 2021. The decline in engine powered units is due to the increase in electric models that are currently the most popular power option.
COVID-19 production drop is mostly due to supply chain disruptions such as lack of part(s) availability. During COVID times, electric golf car production dramatically increased (some electric manufacturers reporting up to a 200% increase in production).
The pandemic accelerated the demand for golf cars, not for golf course needs, but as a “lifestyle” vehicle. New models are being worked on with different fuels to make them less expensive and cleaner to run. Gas models are more powerful and are preferred on hilly terrains.
Production should remain flat over the next couple of years with an increase in gas powered units that are eco-friendlier. Further recovery in the US economy and a growing number of golfers will support demand. Expect production of gas-powered units to increase 5-10% by 2025. Electric -powered units could increase by 100%. PSR
Carol Turner is Senior Analyst, Global Operations, for Power Systems Research
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DATAPOINT: 2021 NA Golf Car Production
Today Joe Delmont presents the 2021 forecast for Combine production in North America. This forecast has been developed by Carol Turner, Senior Analyst of Global Operations at Power Systems Research. Carol provides annual production forecasts for important equipment applications.
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VinFast Launches Two EVs, Announces US HQ and Manufacturing Plant
Akihiro Komuro VinFast has selected Los Angeles as its US headquarters and recently shared plans to begin manufacturing in the U.S. in 2024. VinFast is the automotive manufacturing subsidiary of VinGroup, a Vietnamese conglomerate that develops everything from real estate to technology and healthcare. The VinFast subsidiary was founded in 2017.
VinFast is working to deliver its flagship EV, the VF e34, later this year in Vietnam. When that happens, it will be the first-ever EV sold in the entire Vietnamese market.
Last month, we reported that VinFast was ambitiously entering markets overseas, beginning with the US, Canada, and Europe at the same time.
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DATAPOINT: 2021 NA Production of Tractors
101,500 units is the estimate by Power Systems Research of the number of tractors to be produced in North America during 2021. In this report, we consider North America to include Canada, Mexico and the United States.
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
Market Share: With combined plant totals of 75% Deere leads in production of AG tractors in North America with about 63,200 units. In second position is Kubota (8,000 units) with 9.5%. Third is Case with about 8%.
Worldwide Distribution: Canada exports about 75% of its North American Ag Tractor production, Mexico, about 60%, and the United States, up to 45% of its total production.
Trends: In 2020, production of Ag tractors in North America decreased nearly 24% to only 84,600 units. Production is expected to rebound 20% in 2021 to more than 101,500 units. COVID-19 related factors played a role in the decline last year, especially for parts availability and equipment inventory levels. Expect production to increase 10% by 2025. PSR
Carol Turner is Senior Analyst, Global Operations, for Power Systems Research
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North America Economic Outlook – November 2021
Yosyf Sheremeta, PhD, Director of Product Management and Customer Experience, takes a look at what’s in store for the industry segments we follow for the rest of 2021 and beyond.
Transcript
Welcome to the PSR PowerTALK podcast produced by Power Systems Research.
00:06 Joe Delmont
From Power Systems Research I’m Joe Delmont, editor of PSR PowerTALK.
Today we’ll talk with Yosyf Sheremeta about the economic outlook for North America.
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DATAPOINT: 2021 North America Combines
Today Joe Delmont presents the 2021 forecast for Combine production in North America. This forecast has been developed by Carol Turner, Senior Analyst of Global Operations at Power Systems Research. Carol provides annual production forecasts for important equipment applications.
Transcript
Welcome to the PSR PowerTALK podcast produced by Power Systems Research.
00:06
From Power Systems Research, I’m Joe Delmont, editor of PSR PowerTALK.
Today we’ll discuss a data point covering 2021 North American production of combines. When we talk about North America in this podcast, we mean the United States only.
This forecast has been developed by Carol Turner, Senior Analyst of Global Operations at Power Systems Research. Carol provides annual production forecasts for important equipment applications.
00:39
Combines, overall, boost crop output and farm income. We expect that production of these units in North America this year will be about 6300 units. That would be up about 400 units or 7 1/2% from 2020. The gain is mainly due to increased optimism by farmers regarding their future prospects.
01:05
In 2020 we saw a huge drop from the previous year. 2020 production was 5850. Down nearly 8%, or about 500 units, from 2019. Even with an increase this year, annual production will still be slightly less than that of 2019, when 6400 units were built. Production this year will be about flat with 2019.
01:33
As much as 30% of US production of combines is shipped worldwide.
COVID-19 related factors played a role in the decline in 2020, of course; especially for parts availability and the drop in orders for new machinery.
Sales of combines picked up in the fourth quarter last year after a tough spring for sales.
Curt Blades, Senior VP of Agriculture for AEM, “The increase reflects farmer sentiment about the future of their operations.” he says. “It’s really a good early indicator of whether folks are enthusiastic about where markets are headed.”
This is a favorable sign. A few years ago, farmers were reluctant to buy or trade in pricey equipment because of lower commodity prices. In 2017, for example, production and purchases of new combines rebounded. The gain was attributed to an increase in commodity prices, such as corn and soybeans, that peaked in 2013 and 2014.
Expect production of combines in the US to gain as much as 10% by 2025.
02:47
This data is pulled from two of the major Power Systems Research databases: OE Link — the database of OEM production and forecast data, EnginLink — which provides engine production, forecast, and specification data.
Look for Datapoint reports every month in the PSR PowerTALK news report and on this podcast.
Contact us for more information on other off-road products and Ag related equipment.
03:17
To read a transcript of this podcast, visit the website at powersys.com and click on the podcast archive.
Thank you for joining the PSR PowerTALK podcast. This podcast will be available on demand. Search for “PSR PowerTALK” in your podcast app or Google “Power Systems Research” to sign up today.
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Strong Growth Will Continue into 2022-23
Yosyf Sheremeta The third quarter of 2021 brought steady economic activities and strong economic recovery in North America. Despite this strong economic recovery, many existing and new challenges developed. Pandemic-related supply chain disruptions, logistics backlogs, shortages within semiconductor products and new virus re-problems, labor market issues (shortages across service industry as well as skilled labor)- have contributed to slower growth in Q3 2021 than previously expected.
With the help of government support and targeted fiscal policies, the US economy is showing a strong comeback in 2021. Furthermore, it is on a positive trajectory to continue to grow in the next few years. There are many reasons for us to be optimistic about this trend. Our positive outlook is based on the reviews of key economic indicators, including GDP, unemployment, and inflation. In our previous forecasts, we discussed recovery trends for the post-pandemic period, and we called for a return of demand for most markets in 2021, especially during H2 2021.
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