Understanding the current commercial vehicle market is pertinent for so many businesses. For sales projections and budgeting and many more reasons, understanding the current state of the industry is why ACT Research developed it's State of the Industry series, particularly the N.A. Classes 5-8 report.
Are fears about a recession warranted?
Hear from the most accurate economic forecaster Sam Kahan of ACT Research
Preliminary North America Class 8 net order data show the industry booked 10,900 units in August, up nearly 6% from July, but 79% below last August’s best-ever order month. Note that these numbers are preliminary. Complete industry data for August, including final order numbers, will be published by ACT Research in mid-September.
Falling freight rates (as much as 20%) have been attributed to "more trucks than there are loads" for truckers and shippers.
In the release of its Commercial Vehicle Dealer Digest, ACT Research noted that the heavy truck and trailer markets, and increasingly the medium duty market, are heading for corrections in 2020, even as the slow growth US economic outlook remains largely unchanged, aside from concerns about trade and tariffs. The key driver of the near to mid-term outlook is the US consumer, who remains well positioned to keep the economy out of the ditch, even as key freight-generating sectors of the economy take a pause.
According to ACT Research’s recently released Transportation Digest, Class 8 market indicators are divergent, with some at all-time highs even as other metrics point to coming weakness. The medium duty market measures are lower in the short-term, but still positive against longer-term comparisons.
On February 4, 2019, Kenny Vieth gave an interview with CNBC's Nightly Business Report. At that time the commercial vehicle trucking industry was coming out of a record setting year, 490,000 heavy duty, class 8 orders. However, questions were being asked about industry capacity and the potential for high backlogs (300,000 at the time of interview) and cancelations coming in later 2019. At the time of this interview, there was a 3-month decline in new truck orders, considered a signal of a potential slowdown.
According to the recently released N.A. Commercial Vehicle On-Highway Engine OUTLOOK, published by ACT Research and Rhein Associates, engines over 10L are projected to account for more than 85% of the Class 8 production between 2020 and 2024, and the trend to smaller displacement engines is expected to continue.Tom Rhein, President of Rhein Associates commented, “Although the over 14L engine category will remain the largest segment in 2019, there is a trend to smaller displacement engines in the over 10L market segment for Class 8 trucks and tractors, with an acceleration prompted by new emission regulations expected in 2024.” Regarding Classes 5-7, Rhein said, “In this market, the current metric of interest is gasoline penetration, which continues to see share gains.”
ACT's North America Commercial Vehicle OUTLOOK is the premier report of its kind. Since 1986 ACT Research has been working directly with OEMs as they discretely share their data and information, allowing ACT Research to have an unprecedented level of understanding of the commercial vehicle market. Couple this data with our award winning economist, robust databases, and years of industry experience and you get a best-in-class outlook for the industry.
The average price of total used Class 8 trucks in July dipped 4% month-over-month, while rising against longer-term comparison, up 9% year-to-date. Same-dealer sales, on the other hand, were flat in July compared to June, but contracted 18% versus the first seven months of 2018, according to the latest release of the State of the Industry: U.S. Classes 3-8 Used Trucks, published by ACT Research. The report also indicated used Class 8 average miles was neutral month-over-month and down 1% year-to-date, while average age rose 2% compared to June and 4% on a year-to-date basis.