According to ACT Research’s latest numbers, April Class 8 net orders pulled back to a seven-month low, with benign cancellations. ACT Research attributes the order pullback not to any slowing in demand, but a reflection that the 2021 backlog is essentially filled.
“As we’ve said for some time, commercial vehicle demand is hot, but supply chain problems persist,” said Kenny Vieth, ACT Research’s president and senior analyst. “Since the end of last year, ACT has been reporting that the 2021 question is not one of demand, but rather supply. The freight economy continues to enjoy broad-based strength, evident in freight rates that caught fire last July and have remained at or near record levels for months. With freight rates at current levels, carrier profits are soaring. Finally, jammed ports, inventory restocking, and persistently tight driver capacity suggest that the current freight and profitability landscape has legs, giving truckers the confidence to buy equipment.
“While demand is as strong, or stronger, than it has ever been for both medium- and heavy-duty vehicles,” Vieth continued, “the industry’s ability to tackle that backlog has been beset by a series of issues that have thrown roadblocks in front of its ability to turn orders into trucks, including chip shortages, steel output, and plastic resin availability. Capacity to produce Class 8 vehicles this year essentially is full, and using 2018 as a guide, we would expect OEMs to begin opening 2022 order books in June and July. Broad-based economic strength continues to build the best medium-duty market since ACT began reporting data, with the order trend eclipsing the pre-buy fueled market of 2006.”