North American Class 8 Orders Drop, Medium Duty Rebounds

BLOOMINGTON, IN and COLUMBUS, IN — Two new reports show North American Class 8 truck orders in May declined to their lowest level since September 2013.

The freight transportation forecasting firm FTR released preliminary data showing May net orders totaled 19,714 units, an 11% month-over-month decline and 23% lower than a year ago.

Orders fell in May for the third consecutive month and dipped below the 20,000 threshold for the first time since September 2013.

All major OEMs were affected by the drop in orders, according to the report, with some experiencing larger than expected declines.

Class 8 orders over the last six months have hit an annual rate of 352,000 units.

FTR expects Class 8 orders to fall back into more seasonal patterns for the balance of the year. It noted backlogs remain strong with no expectation, currently, of any reductions in build rates.

“The Class 8 market continues to stabilize, and the overall market remains healthy at this point. At the current rate, we expect orders to bottom out in July in the 16,000 unit range, which will be sufficient to maintain production levels this year. However, some individual OEMs may need orders to improve to maintain their build rates.”

A separate report from commercial vehicle industry data provider ACT Research had nearly the same numbers, but offered a slightly different perspective on the drop.

“Rather than simply considering orders to be a harbinger of weakness, broader context is required in passing judgment,” said Kenny Vieth, ACT president and senior analyst. “In addition to few build slots remaining open in 2015, this is the time of the year when Class 8 orders typically slow.”

ACT Research also said in its preliminary report for May, 39,000 Class 5-Class 8 vehicle orders in North America were booked, down 8% compared to May 2014.

“While the order comparisons are negative, looking only at orders does not provide sufficient context in regard to industry health,” said Vieth, ACT. “Looking back one month to April, Classes 5-8 backlogs were nearly 63,000 units or 37% above their year-ago levels. Hence, orders are softer because many of them have already been placed.”

In the medium duty truck category along, North American orders N.A. rebounded in May to 19,000 units, up 17% year-over-year, clearly signaling strong demand, according to ACT Research.

“This was the sixth time in the past nine months that Classes 5-7 orders reached at least 19,000 units,” said Vieth.

 


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