Preliminary North America (NA) Class 8 net order data show the industry booked 15,800 units in January, down 26 percent from December, according to ACT Research. FTR also is reporting orders for January dropped 26 percent month to month, but to 15,600 units.
“With near-record backlogs in both the medium- and heavy-duty vehicle markets, order activity continued to moderate in January. During the month, NA Classes 5-8 vehicle orders fell to an 18-month low 39,200 units,” says Kenny Vieth, ACT president and senior analyst. In addition, ACT says Class 8 orders were down 68 percent compared with last January.
“Regarding Class 8, recall that January 2018 marked the point at which orders went vertical. We view this January’s order softness as having more to do with pulled-forward orders and a very large Class 8 backlog than with the current supply-demand balance. Softening freight growth and strong Class 8 capacity additions suggest that the supply-demand balance will become a story in 2019, but January seems a premature start to that tale.”
Regarding medium-duty orders, Vieth says, “NA Classes 5-7 orders rose sequentially to start the year on trend at 23,400 units. Over the last six months of 2018, MD orders averaged 23,300 units per month. While up sequentially, January’s orders had the ignominy of being compared with one of the best order months in history. For January 2018, Classes 5-7 net orders fell 24 percent year-over-year, the first negative comparison in 16 months.”
These numbers are preliminary. Complete industry data for January, including final order numbers, will be published by ACT Research in mid-February.
FTR reports this year’s January order activity was down 67 percent versus last year and is the worst for the month since 2010. The low Class 8 order number was not entirely unexpected, as the great majority of fleets already have all their orders in for 2019 and don’t need to place any more orders for a while. Backlogs are expected to fall, but should remain more than 70 percent higher than a year ago. Class 8 orders for the past 12 months have now totaled 402,000 units, according to FTR.
“Orders had to fall below 20,000 units at some point. There were record breaking orders placed last July and August, and this is the payback for that volume. Even with the weak January numbers, over 330,000 trucks have been ordered in the last nine months, so demand for trucks in 2019 remains strong,” says Don Ake, FTR vice president of commercial vehicles.
