“The soft order activity was expected. 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,” says Don Ake, vice president of commercial vehicles at FTR. “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.”
The past three months of heavy truck order activity annualizes to 175,000 units with the annualized rate for the past 12 months falling to 231,000 units.
“Dealer inventories of Class 8 trucks remains bloated, so the only truck orders now are mainly for replacement purposes, with preferred specifications,” Ake adds. “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.”
“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,” says Steve Tam, ACT Research’s vice president-commercial vehicle sector. “While metrics in these segments are improving, they can best be described as not being as bad as they were previously.”
Orders for medium-duty vehicles, according to ACT, slowed to their lowest level since July 2014 – down 14 percent month-over-month and 18 percent lower year-over-year – intake remained 4 percent higher on a year-to-date basis at 17,100 units.
