The US Class 8 market remains bifurcated, with continued overcapacity leading to generationally weak for-hire tractor fundamentals and stimulus/industrial policy supporting vocational equipment demand, as published in the latest release of the North American Commercial Vehicle OUTLOOK.
“On one side of the divide, vocational equipment demand continues to be supported by secular trends and stimulus programs. The clean energy transition and AI are driving utility infrastructure investment, while government programs, such as CHIPS and BIL, have boosted public infrastructure and reshoring projects,” according to Kenny Vieth, ACT’s President and Senior Analyst. “In the case of government incentives, the programs are still in the early stages of grant awards, so these programs still have long legs. All the above is long-term positive for construction-related vocational equipment.”
He added, “At the same time, the US and Canadian tractor markets remain awash in capacity, allowing freight rates to rise only incrementally over the past year. The result has been for-hire carrier profitability at the lowest levels since the global financial crisis. For tractors, neither the current worst-in-15-years depression in for-hire carrier financial conditions nor the private fleet spending of the past couple years support strength into 2025—especially early.”
“Adding to near-term demand challenges, ACT projects dealer inventories to be fuller at the start of 2025, so dealers are also seen as more constrained,” Vieth concluded.
NA CV Forecast Report Overview
The NA CV forecast reports on the trucking industry forecast, providing a status of commercial vehicle demand, tactical and strategic market analysis and forecasts ranging out five years. The report’s objective is to give OEMs, suppliers, investors, and other interested market participants the information they need to make informed decisions in what is traditionally a deeply cyclical market. The report provides a complete overview of the North American markets, touching on relevant demand drivers starting with forward-looking activity metrics, orders and backlogs. Information included in this report covers build and retail sales forecasts and current market conditions for medium- and heavy-duty trucks/tractors, and trailers, North American macroeconomics by country, freight and carrier market performance, used equipment valuation trends, and regulatory environment analysis and impacts.
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
Presently, there is an immediacy in industry data analysis that is rare. With August order and build volumes pushing backlogs to their annual nadir (and multi-year lows), “order season” has not been so important since the fall of 2016. Excessive inventories cloud both the front and back ends of the demand arc, as published in the latest release of the North American Commercial Vehicle OUTLOOK.
“A year ago, the total Class 8 inventory was 61,800 units. At the end July 2024, the Class 8 inventory was a record 88,800 units, an increase of 27,000 units y/y. The increase has not been supported by demand, pushing stocks significantly above an inventory-to-retail sales inferred level,” according to Kenny Vieth, ACT’s President and Senior Analyst. “The same exercise works in the MD market as well. From a near-record 77,800 units in July 2023, July 2024-ending stocks had risen to a new record 101,900 units, an increase of 24,100 units y/y.”
Vieth concluded, “We are sitting in the lull before a hoped-for sustained surge as ‘order season’ gets underway. September is the month in which seasonal factors flip from accretive to dilutive, though September’s factors are modest. The ‘season’ gets underway in earnest starting in October. While inventories are ultimately a headwind, the path of orders is foundational at this juncture: backlogs are low, and BL/BU ratios for Class 8 and trailers indicate unsustainable production levels relative to backlog support. Strong orders in Q4 and into Q1 are imperative.”
Click here to learn more information about ACT's most subscribed report.
ACT Research is featured regularly by major news outlets for our work covering Class 8 truck orders, sales, forecasting, used truck sales, freight rates, trailer sales, and much more. Get more trends, HERE.
Save time with ACT Research’s media kit. Access ACT Research’s analyst bio, logos, press releases, video library, and more at your convenience. Our analysts are committed to delivering the most accurate data and forecasts. Looking for a speaker? Each analyst is available to speak at your conference or event. Access Media Kit Here.