The two companies that collect and analyze data on various aspects of the trucking industry report a slight uptick in August of orders for Class 8 trucks.
ACT Research said its preliminary North America Class 8 net order data show the industry booked 10,900 units in August, up nearly 6% from July, but 79% below last August’s best-ever order month.
FTR reported preliminary North American Class 8 orders for August at 10,400 units, up a “modest” 4% month-over-month but down 80% year-over-year. FTR said Class 8 orders have fallen into a narrow range since May, averaging 11,000 units a month during that period.
OEMs have built through much of the backlog created by the record orders in 2018 and fleets are in no hurry to start ordering for 2020, as there are expected to be ample build slots available and no component part shortages.
FTR said it is expected that the market will return to normal, seasonal order cycles, with large fleets placing their 2020 requirement orders in the fourth quarter.
Class 8 orders for the past 12 months have totaled 298,000 units.
“Weak freight market and rate conditions and a still-large Class 8 backlog continue to bedevil new Class 8 order traffic,” said Kenny Vieth, ACT Research president and senior analyst. “Though with OEMs opening their new model-year order books, order weakness is increasingly the story of an overcapacitized Class 8 fleet, as truckers start to make their plans for 2020. August is typically a weak order month. Seasonal adjustment boosts the month’s intake to 12,500 units, a narrower 2.8% month-to-month improvement.”
Don Ake, vice president commercial vehicles said “The Class 8 market is at a turning point. The huge orders in 2018 supported the robust production last year and through much of 2019. Now the economy has slowed and there are enough trucks to handle the available freight growth. OEMs are cutting production rates, eventually down to near replacement demand levels.
“There is a tremendous amount of uncertainty in the economy right now due to tariffs and the trade war with China. Businesses are holding back on capital investment and our industry is no exception. Fleets are going to be cautious about buying new equipment in the short term. We do expect orders to increase in October. However, if freight growth is still muted and manufacturing sluggish, the big fleets may just place orders for the first quarter and take a wait and see approach.”