Net order activity in October for new Class 8 and Class 5-7 trucks reflects the continuing slowdown in market activity, according to ACT Research Co.’s latest State of the Industry report.
ACT found that last month, 25,900 net orders were booked for Class 8 trucks and 21,900 for Class 5-7 trucks.
Economic and trucking-specific trends affecting truck orders “continued to evolve in October,” said Steve Tam, ACT vice president, Commercial Vehicle Sector. He noted that developments in the economy and the industry continued to evolve in October-- and that has not helped to clarify the market situation.
“Whether one subscribes to the theory that both economic and industry woes have resulted in excess inventories that are currently correcting or the theory that weakening growth is more permanent in nature and will persist, the results are the same,” Tam stated. He said the upshot is that many fleets have curtailed their planned activity for 2016.
“Class 8 net orders failed to wow in October,” Tam continued. “Historically, a number of factors converge to send orders nearly 15% above average. That said, orders did increase 34% month over month, but at a lower absolute level than previously expected. And the mismatch between order intake and build has resulted in a backlog drain that is now entering its eighth consecutive month.”
Tam said order activity was “equally as unimpressive for the Class 5-7 market in October, though expectations were not quite as high as for the Class 8 market.”
He added that, sequentially, medium-duty demand dropped about 1%. Cumulatively, ACT found that Class 5 is up more than 11% while Class 6-7 is “holding steady,” down less than 1%.” Tam noted that “slowing in state and local government and municipality purchases accounted for much of the lower Class 6-7 demand.”