Economies are inherently cyclical in nature. Given that, ACT Research says, the prosperity of 2019 will likely contribute to a “tougher” 2020 for the medium- and heavy-duty truck markets in North America.
According to the transportation research firm’s latest State of the Industry North American Classes 5-8 Report, although a recession is unlikely next year, uncertainty regarding the economy in the latter half of 2019 will detrimentally affect medium- and heavy-duty truck markets next year.
“After peak build and sales in 2019, significant declines are ahead in 2020, as sales and build will follow trends in net orders and backlog volumes lower in their respective markets,” said Kenny Vieth, ACT Research’s President and Senior Analyst. He explained, “Recent articles point to a growing belief that a recession is likely to be averted in 2020, so the economic ‘days’ are likely to become brighter as we move through 2020. Unfortunately for the industry, the expected rebound will not come soon enough, or be robust enough, to take a sharp equipment downturn off the table.”
ACT’s State of the Industry: NA Classes 5-8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders, and retail sales. Additionally, Class 5 and Classes 6-7 are segmented by trucks, buses, RVs, and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs. This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package. A first-look at preliminary net orders is also published in conjunction with this report.
Looking specifically at the North American Class 8 market, Vieth said, “After October’s modest order strength, November data quelled thoughts of a better-than-expected order season, with November’s booking down about 4,400 units from the previous month.”
Regarding the medium duty markets, Vieth noted that, Weakness has spread in medium duty demand. The drivers of lower build rates are weak orders, falling backlogs, and elevated inventories. That weakness in turn is driven by the above-trend buying of the past 18 months, leading to slowing demand for trucks and RVs.”