According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, Class 8 inventory-to-sales ratio, seasonally adjusted, hit 3.5 months in February, while the Classes 5-7 inventory-to-sales ratio dropped from a “highest in a decade” in January to 3 months in February.
“From a current data perspective, regardless of source, February marks the last month of essentially COVID-free data points,” said Kenny Vieth, ACT Research’s president and senior analyst. “While some portion of the U.S. population was working on the assumption that the virus was ‘fake news,’ the rest were still getting their heads around concepts like ‘social separation’ and ‘exponential.’ Decrements in the March data releases will be nothing to compare to the April data we will see in May.”
Speaking about the heavy-duty market, Vieth said, “The Class 8 market in February continued to operate in line with pre-pandemic expectations: Massive 2019 demand for Class 8 tractors in a period of falling industrial activity created significant overcapacity that, in turn, caused carrier profitability to fall sharply through the course of last year, setting the stage for weak demand in 2020.”
Regarding the medium-duty markets, he said, “Prior to COVID-19, medium-duty vehicles were benefitting from the strong consumer economy. With the service sector being undermined presently, it is difficult to imagine that Classes 5-7 commercial vehicles won’t be hit hard as a result.”