TORONTO- Truck sales and production are expected to rebound in 2015 due to higher demand in North America, and improving demand in Asia and Western Europe, according to the newest Global Auto Report from Scotiabank.

The North American heavy truck industry has been improving over the past two years, with gains accelerating in recent months alongside record freight volumes. Truck production has ramped up to the highest level in nearly a decade, and further gains are on the horizon as the order backlog has surged by more than 70 percent over the past year and is approaching 200,000 units for the first time since 2006,” the report claims.

Industrial activity across North America expected to advance nearly four percent again this year and industry profitability is on the rise, according to Scotiabank.

And industry analysts at ACT Research report that class 8 trucks orders surged more than 40 percent in North America last year, jumping to the highest level since 2004. Production increased 21 percent in 2014 and is expected to exceed 300,000 units this year for the first time in nearly a decade.

“However, even with accelerating truck output, record freight volumes have led to demand growth outstripping supply,” Scotiabank experts say.

And there’s weaker demand for trucks in Latin America and Chine due to fuel emissions standards introduced in January 2015.

“Aside from rising freight tonnage, an aging fleet is also supporting higher truck sales [in North America]. North American retail sales have been below 250,000 units – the annual replacement level required by the industry – in six of the past seven years, and the average age of the trucking fleet still remains near the record 9.6 years set in 2013,” Scotiabank claims in the report.

Many class 8 trucks purchased during the last cycle peak between 2004 and 2008 are still in operation and are the prime replacement candidates, following several years of minimal fleet expansion.

“While Canada no longer produces heavy trucks, the improvement in North American commercial truck demand represents a positive development for several Canadian provinces,” Scotiabank claims. [Note that PACCAR still operates a plant in Ste. Therese, QC, building medium-duty Kenworth and Peterbilt trucks. — Ed.}

For example, one of Nova Scotia’s main exports – tires – jumped eight percent last year to a record of $1.1 billion.

“Given the strength of the North American truck market, the [Nova Scotia tire] facility received a new investment of $73 million last year,” the report claims.

And of course, a healthy truck demand in North America is good news for PACCAR’s medium-duty truck plant in Quebec and for several Canadian manufacturers who continue to assemble trailers.  

You can read the full report here.