Dark clouds have loomed over the trailer market in recent months, ACT Research reported Tuesday that while those clouds haven't gone away, there are some reasons to finally be positive about the market this month.
Peak order season began last month and September's orders were the first year over year increase for the market in more than a year.
“September’s order intake, at 31,300 units, signifies that interest remains and the negotiations of the past few months are turning into booked business,” says Jennifer McNealy, director CV Market Research & Publications at ACT Research. “What we don’t yet know, and why some in the industry still consider demand worse than a year ago, is how long this level of deal closing can be sustained amid the freight recession that has lingered through 2023.”
McNealy says the strong order total last month also boosted the backlog, a good sign for maintaining production levels through the fourth quarter.
“Trailer backlogs grew 3% sequentially, but were nearly 21% lower year over year, against 2022’s supply-chain constrained and pent-up demand heavy environment,” she says. “The backlog is now nearly 138,800 units.”
[RELATED: Trailer orders leapt forward in September]
She adds, “With a two-week drop, the positioning of the backlog relative to build remains healthy. Despite the month’s bigger backlog, a stronger September build rate pushed the seasonally adjusted backlog-to-build ratio to 6.0 months. At September’s build rate, the current backlog essentially commits the industry well into the first quarter of 2024. That said, the data continue to provide mixed messages, with cancellations remaining elevated, even as backlogs remain at healthy, albeit shorter, levels.”