According to preliminary numbers from FTR and ACT Research Co., heavy-duty truck orders were up for May, while medium-duty sales fell.
FTR has released preliminary data showing May 2016 North American Class 8 truck net orders only up slightly from April to 14,100 units, a 4% m/m comparison. Orders for Class 8 vehicles remained subdued with May 2016 activity the lowest for the month since 2010 and 30% below a year ago. The past three months of Class 8 order activity annualizes to just 175,000 units with the annualized rate for the past twelve months continuing to fall, now at 231,000 units.
“The soft order activity was expected,” says Don Ake, FTR’s vice president of commercial vehicles. “The good news is that they did not fall further from April, but some erosion in order activity is expected during the slow summer months. Fleets do not need to order many trucks in the current environment because in most cases they have enough trucks to handle the freight. Freight demand is still sluggish due to the build-up of business inventories.”
Preliminary numbers from ACT tell a similar story, coming in at 14,300 orders for Class 8 and 17,100 orders for Classes 5-7, for a total of 31,400 May truck orders.
“Three consecutive months of decidedly lower net orders for heavy-duty commercial vehicles appear more closely aligned with current activity in the manufacturing and energy sectors of the broader economy,” said Steve Tam, ACT’s vice president for the commercial vehicle sector. “While metrics in these segments are improving, they can best be described as not being as bad as they were previously. Framed by the ongoing overcapacity narrative (too many trucks chasing too little freight) and resultant weak freight rate environment, along with continued softness in late-model used tractor values, May’s Class 8 net orders fell 31% against a moderately tough May 2015 comparison to 14,300 units. Positively, May’s orders, true to season expectations, bested April, coming in 4% higher.”
“Dealer inventories of Class 8 trucks remain bloated, so the only truck orders now are mainly for replacement purposes, with preferred specifications,” added Ake. “Backlogs will continue to fall, they are now below 2014 levels for May. It will be a challenge for the OEMs to schedule production through the summer. Extended vacation shutdowns are anticipated.”
ACT’s preliminary May numbers for medium-duty would place that segment at its lowest order level since July 2014; orders were down 14% month-over-month and 18% year-over-year. Even with that being the case, intake remained 4% higher on a year-to-date basis.
