The two companies that collect, analyze and publish data pertaining to the commercial vehicle market reported what might be called a significant decline in trailer orders for May.
FTR reported preliminary orders for 11,700 units, the lowest total since May 2016.
ACT Research reported preliminary new U.S. trailer orders of 15,500, down 16% month-over-month, but after accounting for cancellations, said net orders slid to 10.5k units, down 28% from April.
FTR said orders for 2019 production have basically come to a halt, as most build slots for the year are already filled. Trailer builds were hefty for the third straight month and should remain elevated in the short-term.
However, production numbers in the second half will likely moderate due to expected slower economic and freight growth. The flatbed segment is already showing signs of weakening due to easing in manufacturing and industrial activity. Trailers orders for the past 12 months now total 356,000 units.
“Orders should rise in June as OEMs begin taking orders for 2020,” said Don Ake, FTR vice president of commercial vehicles. “June orders will be a good indication of how the larger fleets view the freight market for next year. Carriers may be cautious as long as the tariff situation is disrupting freight flows and creating significant business uncertainty.”
ACT Research said year-to-date, net orders are 40% below last year, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailer Report. Near-record backlogs have filled 2019 build slots for many OEMs, and there continues to be resistance toward booking orders into next year, resulting in the order volume contraction.
“We’re now running into very difficult year-over-year comparisons, as OEMs are generally unwilling to accept orders for 2020,” said Frank Maly, director–CV Transportation analysis and research. “We hear that some OEMs may open their 2020 orderboards in June; if so, expect better comparisons in the months ahead.
“However, given market pressures of strong capacity growth in the face of a slowing economy and tariff uncertainties, the anticipated order surge may not be as robust as many may assume.”