Preliminary trailer order numbers for the month of July show a significant drop from the previous month, according to analysis from ACT Research.
The preliminary estimate for U.S. net trailer orders is 9,950 units, a drop of more than 25% compared to June. While July is usually the weakest month of the year for trailer orders, the projected fall for 2016 is more than double what was projected by typical seasonal patterns.
“July’s results appear to be impacted by both seasonal and cyclical pressures,” said Frank Maly, ACT’s director of transportation analysis & research. “New order placement was weak, as fleets continue to evaluate their investment plans in the face of a lackluster economy and resulting impact on both freight rates and volumes.”
Compared with July 2015, orders are down 51%, which was a steeper decline than industry analysts like Michael Baudendistel from Stifel Transportation had expected.
“The continued deterioration in industry orders in the prior three months gives us added confidence (despite the fact that the summer months are generally weak seasonally) in our below-consensus outlook for semi-trailer orders and production, which we believe will continue to “catch up” to the more severe weakness seen in Class 8 equipment recently,” stated Baudendistel in an email to investors.
The final July trailer order numbers will be published later in the month, but ACT’s preliminary estimate should be within 5% of the final number.