Preliminary Class 8 net orders in North America for December 2019 were 20,000 units, according to ACT Research and FTR.
FTR reports fleets are being very cautious, only ordering what they know they need for the next few months. Orders averaged just under 20,000 units a month for the fourth quarter, basically right at replacement demand, and order rates are expected to stay in this range for the next few months.
Although the December order activity improved 14 percent month over month, the total was still below the “less-than-robust” results seen during October and down 7 percent year over year. Class 8 orders for the past 12 months have now totaled 179,000 units, FTR states.
“This is as balanced and stable as you are going to see in Class 8 ordering. Fleets are ordering trucks according to their standard replacement cycles and also for normal delivery cycles. They are not speculating about the future direction of the freight market because there is too much uncertainty. This is a ‘wait and see’ approach,” says Don Ake, vice president, commercial vehicles.
“The freight market is strong, but growth has stalled. The good fleets are making money, the weak fleets are leaving the industry. It is a rebalancing environment,” Ake says. “Fleets have the funds to replace old units and with a growing economy, they have the confidence to do so. However, the equipment market is in a holding pattern due to economic and political factors. The political uncertainty will only intensify up to the election.”
ACT reports orders increased 14 percent from November and are down 6.5 percent from year-ago December.
“Overbuying through 2019 and insufficient freight to absorb the ensuing capacity overhang continued to weigh on the front end of the Class 8 demand cycle in December,” says Kenny Vieth, ACT president and senior analyst.
“Recalling July and August, orders were down 80 percent from the corresponding months in 2018. December’s orders brought the full-year 2019 volume to 181,000 units versus 490,100 units in 2018,” Vieth says. “For all of Q4, Class 8 orders were booked at a slightly above the 2019 trend 195,600-unit [seasonally adjusted annual rate].”
Final FTR data for December will be available later in the month as part of its North American Commercial Truck & Trailer Outlook service. Complete ACT industry data for December, including final order numbers, will be published in mid-January.
