Preliminary Class 8 net order data show the industry booked 14,800 units in April, dropping 6.2 percent from March, but down 57 percent from year-ago April, according to ACT Research. Meanwhile, FTR reports orders for April at 16,400 units, 52 percent below April 2018.
“We continue to contend that current order weakness has more to do with very large Class 8 backlogs and orders already booked, than with the evolving supply-demand balance,” says Kenny Vieth, ACT president and senior analyst. “Of course, contracting freight volumes, falling freight rates and strong Class 8 capacity additions suggest that the supply-demand balance will become an issue later this year.”
Regarding the medium-duty market, Vieth says, “While the U.S. manufacturing/freight economy has been droopy since late 2018, the medium-duty market continues to benefit from underlying strength in the consumer economy. In April, NA Classes 5-7 net orders were 23,100 units, down just 6.8 percent year-over-year and up 12 percent from March.”
ACT’s numbers are preliminary. Complete industry data for April, including final order numbers, will be published by ACT Research in mid-May.
FTR notes April is the fourth consecutive month for Class 8 orders to be below the 20,000 mark and is the lowest April total since 2016. Orders have remained remarkably consistent for the first four months of the year, tracking within a narrow 1,000-unit range, with April just 5 percent up from March. Class 8 orders for the past 12 months now total 380,000 units, according to FTR.
Fleets continue to search for open build slots in the 2019 production schedule. Backlogs remain fluid with orders being rescheduled, often opening up build slots in the near term. FTR expects this type of order pattern continuing until ordering for 2020 begins.
“Near-term build slots are becoming available as fleets rearrange orders based on current needs. There still is limited cancellation activity, as fleets do not want to give up build slots they may need at a later date. They remember what happened last year when they needed trucks but could not get enough of them,” says Don Ake, FTR vice president of commercial vehicles.
“Economic growth is expected to moderate soon, slowing down the freight markets. However, currently there is still a need to replace older trucks and also get more new trucks on the road,” Ake says. “Fleets have their expected requirements orders in for the year and are working with the OEMs to schedule production and deliveries as needed. Some washout of the backlog due to increased cancellations is still expected to occur later this year.”
Final data for April will be available from FTR later in the month as part of its North American Commercial Truck & Trailer Outlook service.