June preliminary North America Class 8 net orders were 14,800 units, down 37% m/m and 12% y/y. Complete industry data for June, including final order numbers, will be published by ACT Research in mid-July.
“Even in good years, Q2 typically delivers below-trend orders, while Q4 orders can trigger optimism at the bottom of the cycle. With the long bottom in freight volumes and rates continuing in the most recent data from DAT amid lingering market overcapacity, for-hire carriers’ financial performance has been dismal,” shared Kenny Vieth, ACT’s President and Senior Analyst. He continued, “Entering the historically worst time of the year for orders at the bottom of tractor buyers’ profitability cycle is producing results in line with expectations. At the same time, the brightest spot in the economy has been consumer services spending, helping to support steady medium-duty truck demand.”
Regarding medium duty orders, Vieth added, “Reflecting underlying service sector strength, NA Classes 5-7 net orders were 19,000 units in June, down 1.6% m/m, but up an in-line 3.3% y/y.”
State of the Industry: NA Classes 5-8 Report Overview
ACT’s State of the Industry: NA Classes 5-8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders, and retail sales. Additionally, Class 5 and Classes 6-7 are segmented by trucks, buses, RVs, and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs. This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package. A first-look at preliminary net orders is also published in conjunction with this report.
ACT Research Overview
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
Additional Resources
Some of the recent Class 8 order strength is likely due to a small amount of prebuying, but overall, May’s orders are likely anomalous, as the industry is in the weakest period of the year for orders, and carrier profitability remains at multicycle lows, as published in ACT Research’s latest State of the Industry: NA Classes 5-8 report.
Final North American Class 8 net orders totaled an unseasonally high 23,560 units in May (29.2k seasonally adjusted), up 51% y/y. Total Classes 5-7 orders fell 4.9% y/y to 19,306 units (20.9k seasonally adjusted).
“US Class 8 tractor orders rose 51% y/y in May, and vocational truck orders increased 48% y/y,” according to Kenny Vieth, ACT’s President and Senior Analyst. “Again, these increases are largely untethered from current market conditions, and we expect next month’s orders to be more representative of the current market.”
Regarding inventories, Vieth added, “Between strong production and softening US tractor sales over the past eight months, Class 8 inventories have risen quickly. The reported inventory decrease from March to May is attributed to a fire that broke out at a supplier plant, requiring OEMs to red tag units. Given build was 6,900 units above retail sales in April and May, inventories should have risen, rather than fallen the past two months. On that adjusted basis, Class 8 inventories have risen over 22,000 units the past nine months, reaching levels not seen since August 2019.”
Vieth concluded, “Class 8 cancellations increased in May to 2,623 units and 1.8% of the backlog on a nominal basis. Seasonally adjusted, cancellations were 3,394 units and 2.3% of the backlog, above the long-term average of 2% for the first time in two years.”
Class 8:
Net Orders: 23,560, +51% y/y
Cancellations: 2,623 units, 1.8% of backlog
Click here to learn more information about ACT's State of the Industry: NA Classes 5-8 Vehicles data.
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