Class 8 order weakness a result of lengthy backlogs

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Preliminary Class 8 orders in December totaled 22,800 units, according to ACT Research, while Classes 5-8 orders dropped to 18,100 units.

(Photo: James Menzies)

“For Class 8, with backlogs stretching through 2022 and still no clear visibility on the easing of the everything shortage, modest December net orders reflect OEMs taking a more cautious approach to effectively manage the cycle of customer expectations,” said Kenny Vieth, ACT’s president and senior analyst.

“As well, with a 12-month backlog/build ratio, and the industry only reporting units scheduled to be built within 12 months, some of the current order constraint is built into the data collection process: If the backlog/build is 12 months, new orders are ultimately consigned to the level of industry production.”

He added: “After hitting a Class 8 cancellation speed bump in November, orders rebounded to a level just above the second half of 2021 production trend in December. However, while improved, December’s orders were the second weakest of the year, reflecting ongoing supply side shortages that continue to constrain production. Importantly, we reiterate, with critical economic and industry demand drivers at, or near, record levels, industry strength is exhibited in long backlog lead times, rather than in seasonally weak orders.”