REPORT: Class 8 Truck Orders Hit 31-Month Low, Economic Growth To “Moderate Soon”

Little Rock, Arkansas – North American Class 8 truck orders fell to a 31-month low in April.

According to trucking analysts ACT Research, net orders totaled 14,800 units, while fellow analyst FTR reports 16,400 units were booked.

April’s orders reflected about a 6% dip from March, but was off more than 50% from April 2018.

This is the fourth consecutive month for Class 8 orders to be below the 20,000 mark and is the lowest April total since 2016.

 

“We continue to contend that current order weakness has more to do with very large Class 8 backlogs and orders already booked, than with the evolving supply-demand balance,” said Kenny Vieth, ACT’s President and Senior Analyst.

“Of course, contracting freight volumes, falling freight rates, and strong Class 8 capacity additions suggest that the supply-demand balance will become an issue later this year,” Vieth said.

Orders have remained remarkably consistent for the first four months of the year, tracking within a narrow 1,000-unit range, with April just 5% up from March.

Class 8 orders for the past 12 months now total 380,000 units.

FTR reports fleets continue to search for open build slots in the 2019 production schedule and backlogs remain fluid with orders being rescheduled, often opening up build slots in the near term.

 

FTR expects this type of order pattern continuing until ordering for 2020 begins.

Don Ake, FTR vice president of commercial vehicles, commented, “Near-term build slots are becoming available as fleets rearrange orders based on current needs. There still is limited cancellation activity, as fleets do not want to give up build slots they may need at a later date.”

Ake said FTR expects economic growth to “moderate soon” which will further slow down the freight markets.

However, he expects fleets to continue needing to replace older trucks, but noted, “Some washout of the backlog due to increased cancellations is still expected to occur later this year.”

As for the medium duty market, it is performing a bit better.

ACT reported April’s net orders were 23,100 units, down just 6.8% year-over-year and up 12% from March.

Vieth explained, “While the U.S. manufacturing/freight economy has been droopy since late 2018, the medium-duty market continues to benefit from underlying strength in the consumer economy.”

(Image courtesy of Kenworth Truck Co.)

 


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