Preliminary North America Class 8 net order data from ACT Research show that the industry booked 21,300 units in December, down 24% sequentially from November and 43% from year-ago December.
“For all of 2018, Class 8 orders totaled 490,100 units, far outstripping the previous annual order tally set in 2004 at 390,000 units, with orders averaging 40,800 units per month last year,” said Kenny Vieth, ACT’s president and senior analyst. “Owing to its status as the strongest order month of the year, seasonal adjustment is always unkind to Class 8 orders in December, dropping the month’s volume to a 25-month low of 17,300 units.
“It is important to put slowing orders into context,” he continued. “With a 300,000-plus unit backlog and a solidly booked build schedule, the drop in orders is in line with expectations.”
ACT also found that medium-duty orders fell to a six-month low of 21,500 units after a strong November.
“Seasonality is not a factor in December for medium-duty vehicles, but the month’s orders had the ignominy of being the first negative year-over-year comparison in 15 months, falling 4.6% compared to December 2017,” Vieth said.
According to FTR, preliminary North American Class 8 orders for December fell to 21,000 units, the lowest total since August 2017. December order activity was as expected, with fleets ordering to secure a dwindling number of available build slots in the second half of 2019. There are few build slots remaining for 2019, so FTR says to expect order totals to remain low the next several months. Backlogs will continue to fall but will remain lofty at the beginning of 2019. Class 8 orders for the past 12 months have now totaled 482,000 units, according to FTR.
“Order rates right now are not that relevant because of the record-breaking totals recorded in June and July last year,” said Don Ake, FTR’s vice president of commercial vehicles. “Fleets got a jump on ordering to reserve 2019 build slots, so orders had to fall off at some point, and December was the start of it.
“Because orders rates are reduced, they are not currently a good barometer of long-term demand,” he continued. “All the orders are in, the question now is how many of these orders will actually be built? We will have to watch the build rates and retail sales closely for clues about the future strength of the Class 8 market.
“FTR is forecasting freight growth to ease back some from the 2018 peak, but remain vibrant for the first half of 2019,” he added. “At some point, the economy and freight growth will moderate and truck builds will decline. Then order cancellation rates will rise.”
