The near-term outlook for the truck market is weak, but long term the outlook is positive, according to Cleveland Research Co. The company says that heavy truck industry orders were soft in both July and August, at 11,667 and 12,600 respectively. Orders are expected to recover to 15,000 units in September.
“Our contacts have cut their 2011 heavy truck sales outlook over the last few weeks on weaker macro-economic trends and order intake,” according to a CRC update. “Long term, we are bullish on the domestic truck cycle as the medium- and heavy-duty truck markets return to replacement demand levels. We have already seen the start of this cycle with used truck values and demand recovering in recent months, and carrier balance sheets improving on better pricing and volume.”
CRC believes the domestic medium and heavy truck markets have sizeable upside as the industry recovers to replacement demand levels. “Looking at average heavy truck sales over the last two decades, we see upside to average build levels from current trough levels across both medium-duty and heavy-duty industry sales over the next three years.”