North American Class 8 net orders for May inched upward (61%) from April’s record low, settling at 6,600 units, according to preliminary data released Wednesday by FTR.
Despite the bump over April, May orders were down 37% year-over-year. Class 8 net orders for the last 12 months total 155,000 units.
FTR Vice President of Commercial Vehicles Don Ake said, as states extended restrictions due to COVID-19, fleets remain reluctant to order trucks, creating additional economic turmoil. He expects orders to continue to increase modestly as economic activity resumes after many of the constraints are lifted.
“Considering COVID-related lockdowns across the U.S. and North America at the start of the month, and a slow reopening occurring through May in most areas, it was not an exercise building customer confidence,” added Kenny Vieth, ACT Research president and senior analyst.
Most of the country still had some restraints in place for part of May, making it difficult for fleets to plan for future equipment needs.
“Carriers are more worried about what’s happening today, about their manpower needs and short-term issues, than ordering trucks,” Ake said. “The concern about the pandemic goes beyond just the business and economic anxieties and greatly diminishes fleet confidence.”
Freight volumes have picked up some after bottoming out in mid-April, but the recovery is expected to be slow and uneven.
“Restarting the manufacturing sector from a full-stop was only partly successful, as Mexico’s lock downs remained in effect well after the U.S. began to reopen,” Veith said, “resulting in challenging supply-chain dynamics and fragmented supplier sourcing.”
Recovery has not yet started based on the weak Class 8 orders in May, Ake said, adding June should be a better indicator as more economic activity resumes.
“The economy has entered the restart phase and May was the transition month to get us from shutdown to renewal,” Ake said. “Expect Class 8 orders to rise gradually, as caution wanes and fleet buyers begin to focus on the second half of the year and equipment requirements.”