Class 8 net orders in North America continued July’s upward trajectory, according to FTR, reaching 20,500 units for the month of August. ACT Research’s Class 8 orders totaled 19,500 units.
FTR reports preliminary August order activity was consistent with July, up 3 percent month over month, and up 90 percent year over year. Class 8 net orders for the last 12 months total 177,000 units.
Large fleets continue to buy new trucks according to their replacement cycles, with a few orders going towards expansion purposes, FTR reports. Orders are expected to stay in the 20,000 range for the next few months with buyer confidence increasing as the economy recovers and freight volumes rise. There is less uncertainty regarding the pandemic as businesses and consumers adapt to the current environment.
“This is another positive sign for Class 8 trucks — the second consecutive 20,000-unit month and proves that the July total was not a fluke, with a possible trend developing. Fleets are more confident, but it still is mostly larger fleets purchasing replacement trucks. Medium-sized and smaller fleets remain cautious about ordering trucks,” says Don Ake, FTR vice president, commercial vehicles.
“This is an odd situation in that it is a highly uncertain, yet very stable, environment. You have a pandemic, a presidential campaign and social unrest all occurring at the same time. However, the economy is briskly recovering and generating ample freight. Fleets are ordering only what they need and, thus, orders are aligning very close to production rates,” Ake says.
“We can expect orders to track in the current range until those risk factors are resolved. Right now, the market is in a holding pattern and may stay there through the rest of the year,” he adds.
ACT’s reported preliminary total of Class 8 orders 19,500 is a 4 percent decrease from July, but up 75 percent from a year ago.
“Preliminary data show that August orders for medium- and heavy-duty vehicles jumped to an eight-month high,” says Kenny Vieth, ACT president and senior analyst.
“That volume represented a 5 percent gain from July and a 26 percent improvement compared to year-ago August. The month’s orders marked a third consecutive positive reading, following a period where 18 of 19 consecutive months had negative year-over-year comparisons,” Vieth says.
“Considerable parked Class 8 tractor capacity, generous unemployment benefits and consumers spending more on goods and less on experiences has created a perfect storm for carrier profits over the past several months,” Vieth says. “That convergence of positive factors pushed spot freight rates to record highs in August and the rally in rates is reflected in the sustained rebound in new medium- and heavy-duty commercial vehicle demand.”
ACT reports the Class 5-7 market saw orders at 19,400 units, up 16 percent month over month, but 2 percent below year-ago August volume.
“While still not cracking year-ago order levels, the medium-duty market is competing against tougher year-ago comparisons than the Class 8 market, but Classes 5-7 order levels remained healthy in August,” Vieth says.