Class 8 truck orders dropped for the third consecutive month in December, hitting 28,300 units, according to preliminary data released by FTR.
Large truck orders spent the holiday season moderating and ended the year down 21% from November, but up 25% from last December. Orders for the past 12 months total 302,000 units. The 2021 order intake was about 365,000 trucks and the ACT Research 2023 forecast calls for a softening from the past two years to 296,000.
FTR Chief Executive Officer and Chief Intelligence Officer Jonathan Starks said December's intake figures likely reflect some end-of-year cleanup of the order boards as OEMs look to firm up their production schedules, and Eric Crawford, ACT Research vice president and senior analyst, added that "large cancellations, reflecting a multi-quarter correction in cancellation reporting, impacted the volumes at one of the large OEM groups, which had the effect of pulling down on December’s (medium duty) and (heavy duty) activity."
Orders are now in line with sales and production levels, so any further reductions in incoming orders will start to eat into backlogs, which Starks said "are still elevated but not at such a level that they can sustain significant deterioration without impacting production output."
Essentially all the production slots for the first half of the year are full, and the second half of the year is starting to fill up.
“The heavy vehicle market remains strong despite economic and financial uncertainties," Starks said, "and production will still be limited to some extent by supply chains and labor.”
The dip in order activity, Crawford noted, wasn't necessarily a signal of weakening demand, rather "when factoring in the year-end seasonal uptick in orders began a month ahead of schedule this year (September), which skewed the (year-to-date, seasonally adjusted) average upward, and that September orders represented the highest monthly total on record, we’re inclined to view December’s order intake as a solid end to a robust final four months of the year," he said.