N.A. Decline in Truck Orders Not Surprising

COLUMBUS and BLOOMINGTON, IN – Orders for both medium-duty and heavy-duty trucks in North America posted declines, according to two newly released preliminary reports, but the markets remain healthy.

For the month of June, 34,600 Classes 5-8 vehicle orders were booked, down 14% from May and 17% less compared to June 2014, according to ACT Research.

The commercial vehicle industry data provider said it believes the recent order decline is a reflection of meaningfully larger backlogs rather than any structural change in demand.

It noted during May, Classes 5-8 backlogs were at 56,000 units, or 33% above their year-ago levels.

“At 19,900 units, North American Class 8 orders were down 25% year over year to their lowest monthly net order volume since September 2013. However, starting in June, and for the next several months, seasonal adjustment becomes accretive to Class 8 order volumes,” said Kenny Vieth, ACT’s president and senior analyst. “Seasonally adjusted, June’s order volume rises to 22,200 units – the best order month on a seasonally adjusted basis since April.”

Meantime, medium-duty orders reduced the monthly net order volume to 14,700 units, well below the 19,300 units per month net order average experienced since last July, according to Vieth.

“However, medium-duty orders were down only 3% year over year, so there may be a growing seasonal consideration for softer results in June. Seasonal adjustment is positive in June, boosting orders to 16,000 units.”

A separate report from the freight forecasting firm FTR shows North American Class 8 truck net orders fell for the fourth straight month to 19,624 units, 25% below a year ago. 

Class 8 orders, while fairly predictable for the period, were somewhat above the current seasonal trend showing just a 2% month over-month-decline from May, according to the firm.

It believes the market remains robust, reflected in the orders received in what is typically a weak order month.

FTR said its research shows there are few build slots available for the balance of the year due to the solid backlogs as Class 8 orders over the last six months, equaling an annual rate of 305,000 units.

“The Class 8 market is heading into the summer order ‘bottom’ at a very normal, predictable pace. The drop in orders is not cause for concern at all,” said Don Ake, FTR vice president of commercial vehicles. “Orders should continue to trend down in July and possibly even August. Fleets right now are evaluating their 2016 requirements, and quoting activity by the OEMs has just started. Class 8 orders will remain rather subdued until the fall order season kicks in this October.”

Final data for June from both firms will be available later this month.

 

 


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