March Class 8 truck orders fell once again, dropping slightly compared to the previous month remaining below the 20,000 threshold for the third consecutive month, according to preliminary reports from ACT Research and FTR.
March truck orders were the lowest for March since 2010 and were 67% lower than in March of 2018, according to FTR. While the numbers are not yet finalized, ACT Research projects 15,700 orders for the month.
“March marks the fourth consecutive month of orders meaningfully below the current rate of build,” said Steve Tam, ACT vice president. “Even though demand is a shadow of its former self, slowing order intake belies current conditions. Admittedly, economic and freight growth are slowing, but both are still growing. And in the context of retreat from record levels, it is no wonder truck buyers continue to pursue incremental profits, as evidenced by the number of unbuilt units in the backlog.”
Despite the drop in orders, FTR reports that demand is still strong but is being limited due to the dwindling number of build slots left for all of 2019. This is causing fleets with a need for trucks to take whatever is available to them.
“OEM production slots were scarce in 2018 and supplier constraints caused disruptions in supply, so fleets didn’t want to get shutout this year,” said Don Ake, FTR vice president of commercial vehicles. “Now so many build slots have been reserved, fleets that are currently placing orders for delivery this year don’t have many options.”
Backlogs are declining due to a rebalancing market that is trying to return to normality after a record year for truck buying in 2018.
“Fleets are still putting more trucks in service and competing in a still decent freight market,” said Ake. “It is expected that Class 8 sales will moderate sometime before the end of the year, as industry capacity begins to catch up with the freight surge that began in 2018.”