According to both FTR and ACT Research Co., preliminary numbers show a decline in Class 8 truck orders in May.
FTR’s numbers show Class 8 net orders for May at 16,300 units, retreating after a long, steady streak that had begun in October 2016. May order activity was below expectations, falling 31% under April. In spite of this slowdown, Class 8 orders for May 2017 were up 29% year-over-year. Every OEM, save one, suffered declines in orders to varying degrees for the month. According to FTR, the drop was not totally surprising, as fleets had been placing strong orders for the last several months for second half delivery. The FTR 2017 forecast looks solid, if orders maintain this pace through the summer. Total orders for the past twelve months have totaled 211,000 units.
“The order numbers are not that worrisome, considering the steady volume of orders over the past seven months,” said Don Ake, vice president of commercial vehicles at FTR. “It appears the typical summer order slump just showed up one month early. It does indicate that the market is functioning normally and there is a steady, not robust, upward trend. The slowdown in order activity will give the OEMs a chance to get production lined up with demand.”
“We still expect the Class 8 build and sales to continue to increase as the year progresses,” he continued. “May orders were actually very close to our January forecast, so the market continues to move ahead as expected. Orders should continue at about this pace through the summer, which will be good enough to support stronger demand in Q3 and Q4.”
The numbers from ACT Research Co. showed North American Class 5-8 truck net orders experiencing a sequential decline. Orders fell 11% from April to 38,100 units.
“Differentiating May from April is the fact that all of the month-over-month decline in May resulted from a dramatic slowing in heavy duty order intake,” said Steve Tam, vice president at ACT Research. “Despite the month-over-month decline, May’s combined heavy- and medium-duty volume bested May 2016 by 20%.” Seasonal adjustment in May, which typically kicks off the slowdown in the order season, bumped the seasonally adjusted tally up slightly from actual to 40,500 units.
At 16,800 units, the preliminary read on May’s NA Class 8 orders was ACT’s lowest of the past seven months, shrinking 30% month-over-month but advancing 18% year-over-year. “While the magnitude of the decline is greater than expected, the timing is spot-on,” Tam said. “May is typically the time of the year when order intake drops below average.”
Classes 5-7 orders jumped 13% from April and 22% from last May, to 21,200 units, ACT found. “Medium duty orders saw a resurgence, though not quite to the level they enjoyed in the December to March time period,” Tam said. “As May tends to be a below average order month, seasonal adjustment boosts the month’s net order volume, which rises to 22,400 units.”
