Class 8 truck orders hit their lowest point of the year last month, dropping to around 13,000 units, ACT Research and FTR reported Friday.
ACT says its preliminary July estimate was 13,400 units, down 8% from June and 13% year over year. FTR pegged the month as even worse at 12,400 units, which was down 6% month over month in its data and 7% from 2023. FTR says Class 8 orders of the last 12 months now total 272,900 units.
"Class 8 orders remained at directionally and seasonally expected levels in July," says Kenny Vieth, ACT's president and senior analyst. "Historically, July is the worst month of the year for Class 8 orders, so is awarded the biggest seasonal factor, nearly 24% this year. Applying that seasonal factor boosts July's seasonally adjusted intake to 17,500 units, which results in a narrower 3.7% month-over-month decline."
FTR also notes July's historical weakness but says last month was still noticeably low and "somewhat below seasonal expectations," with the market on a year to date basis now performing slightly below replacement demand levels with an average of 19,400 net orders per month.
But the company also notes the decline is unsurprising given the strong order performance in the first five months of the year and the typically weak seasonal order period. After averaging nearly 16,000 units from April to June, orders have slowed to just under 15,000 units in the most recent three months. FTR adds build slot fulfillment for Class 8 trucks continues to decline as a result.
ACT Research's preliminary July numbers show a seaonally adjusted dip of 3.7% month-over-month.ACT Research
"OEMs experienced a somewhat mixed market this month with vocational markets mildly underperforming conventional, but the overall picture was steady. Despite stagnant freight markets, fleets continue to invest in new equipment, albeit at a slowing pace," says Dan Moyer, FTR senior analyst, commercial vehicles. "Year-to-date order levels are just marginally below historical averages and seasonal expectations, and the market fundamentals remain relatively consistent based on these preliminary orders.
He adds, "We expect to see further reductions in backlogs once the final Class 8 market indicators are released later this month as well as continued growth in an already-record level of inventory. The pressure on OEMs to reduce build rates continues to grow."
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Finally, FTR states orders are now lower on a year-over-year basis for the second consecutive month, but due to the strong performance earlier in the year, net orders for 2024 year to date remain up 18% year over year.
Additionally, Vieth continued that inventories are at or near record levels in both medium- and heavy-duty.
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"The headwinds that have been buffeting the U.S. portion of the North American commercial vehicle industry did not diminish through the first half of 2024 and were arguably a touch worse at the start of the year's second half," Vieth says. "Preliminary results of public TL carriers' Q2 performance are only encouraging in the sense that the nominal results were up from Q1. ... We have been repeatedly surprised to the upside on order activity. As was the case in June, July's orders were more closely aligned with data-driven expectations."
