The two companies that track and analyze the large truck market both reported North American Class 8 October orders at 22,100 units.
FTR said the order level was the highest since November of 2018, but still far below a year ago. October 2019 order activity was the weakest performance for an October since 2016.
FTR said that while October orders were the highest this year and up 79% month over month, they were 51% lower than October 2018, signifying a subdued beginning to the traditional start of the ordering season.
FTR said the order level was boosted by a couple of big fleets placing large orders into 2020, but otherwise smaller orders were placed for the first quarter build. Cancellations are expected to remain elevated as OEM’s shake out excess 2019 orders from the backlog. Class 8 orders for the past 12 months have totaled 192,000 units.
“Orders increased in October as expected, however, caution prevails,” said Don Ake, vice president commercial vehicles. “The trade and political turmoil are producing a highly uncertain business environment. Fleets are only ordering for their immediate needs. They are not willing to speculate much beyond the first quarter of next year. The OEMs have plenty of open capacity right now, so carriers are willing to approach 2020 a step at a time.”
Ake said orders were fair in October.
“Freight growth is flat, as the industrial sector slows and manufacturing struggles a bit. Orders are expected to stay in this range for a few months until there is more confidence in the economy and less turbulence in the trade war and political arena,” he said.
Kenny Vieth, ACT’s president and senior analysts, noted that the industry kicked off “order season” in an encouraging fashion with preliminary order rising to a six-month high in October.
“Class 8 orders were the star of October, rising to an 11-month high,” he said. “While freight market conditions remain weak, the market is arguably benefiting from a substantive change in the “must-have” tractor spec.”
Regarding the medium duty market, Vieth said the fade that started in medium-duty orders during the summer lingered into the start of quarter four and if the preliminary order read stands as printed, October will represent a 40-month order low.