The economy is taking its toll on the North American medium-duty truck market. For starters, General Motors announced at the beginning of June it would shut down its medium-duty business—effectively withdrawing around 22,000 Class 5-7 trucks out of the market each year.

“Coupled with continued weak demand, the General Motors announcement to exit the space sent shock waves through the system,” said Steve Tam, vp-commercial vehicle sector with ACT Research. “Production will continue to be weaker into 2010 as GM inventories are worked off.”

In its latest N.A. Commercial Vehicle Outlook, ACT Research predicts Class 5-7 production will decline 44% in 2009 before regaining half of that fall in 2010. “The industry is still under pressure,” Tam told Fleet Owner. “The economy is still not doing well…we still have a way to go before we get back to normal.”

The report indicates North American medium-duty production will settle at 88,300 vehicles this year, which is down from previous forecasts. In 2008, 157,600 trucks were produced. ACT anticipates the market recouping some of that loss next year, with production rebounding to 123,400. “We hope we’ve taken all the downside risk out of the report at this point,” Tam noted.

Trailer and Class 8 production numbers are also not good, but ACT did not feel the need to revise those figures downward. ACT believes “we’re at or near the bottom” in those categories, Tam said.

ACT predicts Class 8 production to be 106,000 in 2009, down from 205,200, and rebounding to 165,700 next year as new Environmental Protection Agency emissions rules kick in. Tam indicated that production will continue to slowly improve as the economy improves. “We have to remember that there are a lot of trucks unemployed, too,” he said, pointing to the excess capacity in the marketplace due to carriers parking vehicles.

Trailer sales, which have been particularly hard hit by the economy, won’t improve much as production remains low. U.S. production numbers for 2009 are anticipated to come in at 75,900, ACT said, bouncing back to 133,900 in 2010. Production in 2008 stood at 145,600 units.