Class 8 truck orders in May increase compared with weak April

(Click to enlarge.)(Click to enlarge.)

With little place else to go but up, preliminary North American Class 8 net orders for May were up 56 percent and 61 percent from April, according to ACT Research and FTR, respectively. ACT reports 6,700 units ordered and FTR report 6,600 units for May.

Despite the month-over-month increase, ACT reports orders were down 38 percent compared with May of last year. Classes 5-7 market saw orders improve 5.3 percent month over month, and down 57 percent from May of 2019.

“Reflecting the state of the broader economy, there was little to cheer about in May’s industry order activity. Considering COVID-related lockdowns across the U.S. and North America at the start of the month, and a slow reopening occurring through May in most areas, it was not an exercise in building customer confidence” says Kenny Vieth, ACT president and senior analyst.

“Restarting the manufacturing sector from a full stop was only partly successful, as Mexico’s lockdowns remained in effect well after the U.S. began to reopen, resulting in challenging supply-chain dynamics and fragmented supplier sourcing,” adds Vieth.

FTR reports May orders decreased 37 percent year over year, and Class 8 net orders for the last 12 months total 155,000 units.

Fleets remain reluctant to order trucks as states extended restrictions due to COVID-19, creating additional economic turmoil. Orders are expected to continue to increase modestly, as economic activity resumes after many of the constraints are lifted. The recovery is expected to be slow and uneven. It has not started quite yet based on the weak Class 8 orders in May. June should be a better indicator, as more economic activity resumes, according to FTR.

“Most of the country still had some severe restraints in place for part of May. It is difficult for fleets to plan for future equipment needs under these highly abnormal conditions. Carriers are more worried about what’s happening today, about their manpower needs and short-term issues, than ordering trucks. The concern about the pandemic goes beyond just the business and economic anxieties and greatly diminishes fleet confidence,” says Don Ake, FTR vice president commercial vehicles.

“The economy has entered the restart phase and May was the transition month to get us from shutdown to renewal. Expect Class 8 orders to rise gradually as caution wanes and fleet buyers begin to focus on the second half of the year and equipment requirements,” Ake says.

Complete industry data for May, including final order numbers, will be published by ACT in mid-June and FTR’s final data will be available later in the month as part of its North American Commercial Truck & Trailer Outlook service.

Learn how to move your used trucks faster
With unsold used inventory depreciating at a rate of more than 2% monthly, efficient inventory turnover is a must for dealers. Download this eBook to access proven strategies for selling used trucks faster.
Used Truck Guide Cover