Truck Orders Still Show Strength, Trailers Declining

COLUMBUS and BLOOMINGTON, IN – North American Class 8 truck net orders in May declined to just over 20,500 while Classes 5-7 increased to 19,900 net orders, according to recent figures released by commercial vehicle industry data provider ACT Research.

Steve Tam, ACT’s Vice President, Commercial Vehicle Sector, said amid an economy sending mixed signals, the North American Class 8 market performed to expectations in May.

“While focusing on the order intake of the past may bring feelings of euphoria, a glance into near term expectation is sobering and much more instructive,” he said. “Historical order placement practices suggest orders for the next four months will be 15% to 20% below average.”

In the medium-duty market Tam said in May it bucked seasonal expectations that called for a moderate slowing, but there was instead a nearly 11% gain from the month before.

“More importantly, it was 22% higher than May 2014, and on a seasonally annual adjusted basis, orders are flowing in at a little over a 230,000 unit pace, very much in line with expectations,” Tam said.

Meantime, a separate report from the freight transportation forecasting firm FTR shows in May 2015 U.S. trailer net orders were 15,200 units, 14% below the previous month and down 29% year-over-year. 

It said the traditional summer slide continues, earlier and more pronounced than normal, however, there is still plenty of backlog available to support strong build rates through the end of the year.

U.S. trailer orders have annualized over the past twelve months at 326,000 units.

While backlogs are strong, they have fallen 15% since the January peak, according to FTR. Dry van, flatbed, and liquid tank were the primary segments affected by the lower order rate in May. Refrigerated vans and the dump trailer market continue with positive comparisons while production remains steady for all trailer types.

“The market has peaked in terms of orders and backlog and has started to moderate. This is to be expected, and conditions appear to be very normal,” said Don Ake, FTR Vice President of Commercial Vehicles. “The market descent has started, and, by all indications, it appears we are headed to the expected soft landing.”

He said order rates should continue to fall for the next few months. Vocational trailers, except for dumps, have started to weaken faster than vans. 

“This is due to the cut backs in the energy markets, exports, and some industrial sectors of the economy. Higher inventories indicate fleets are incorporating new trailers into use at a moderate pace,” Ake said.

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