TORONTO, (May 3, 2005) — Despite record high fuel and insurance prices, sales of heavy-duty trucks in North America continue to surge, according to the latest Canadian Auto Report released today by Scotia Economics.

Demand for commercial heavy-duty transport trucks has been on a nonstop ascent since 2003, and will likely continue well into 2006, before new EPA-mandated engines are scheduled to hit the market.

Industry estimates suggest that new orders for class 8 trucks in North America will climb by at least 20 percent this year to 280,000 units- a level approaching the previous 1999 peak of 293,000.

According to the report, auto industry earnings are under severe pressure, with estimates for automakers and parts suppliers slashed by nearly one-third over the past ninety days. However, the heavy-truck segment is the exception, with first-quarter earnings double year-earlier levels. Earnings estimates for heavy truckmakers continue to move higher. Profit estimates for 2005 for heavy truck manufacturers have surged over the past three months, despite concerns over the drag from high oil prices on the U.S. economy.

“Rising earnings estimates reflect a 40 percent year-over-year surge in U.S. sales of heavy trucks in the first quarter, as well as a 27 percent gain in Canada,” says Carlos Gomes, Scotiabank’s auto industry specialist in a press release. “In fact, heavy truck orders have nearly doubled over the past two years, lifting the industry’s order backlog to a six-year high.”

Gomes estimates that the order backlog for heavy trucks is currently 7.2 months, up from only 2.8 months in late 2003, and an average of roughly 5.5 months over the past decade.

Heavy truck manufacturers operating in Canada — Freightliner’s Sterling subsidiary, Navistar International, and Paccar — are scheduled to produce 30,000 vehicles in Canada during the first six months of 2005. That’s a 35 percent year-over-year increase to a level matching first-half 1999 peak output. Full-year heavy truck production in Canada set a record of 60,500 units in 1999.

Scotia Economics, part of the Scotiabank Group, provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance.