According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, Class 8 inventories rose 3,400 units month-over-month in January, as production outpaced expectedly weak sales.
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.
“With the rise in inventory and weak sales, the Class 8 seasonally adjusted inventory-to-retail sales ratio rose to 3.9 months, which is the second highest reading in history,” said Kenny Vieth, ACT Research’s President and Senior Analyst. He continued, “Additionally, our backlog analysis continued to show good fill rates relative to build plans in the first half of 2020, with the remainder of Q1 75% filled compared to an 84% 10-year average at the end of January.”
Speaking about the impact of the coronavirus, Vieth said, “On balance and with appropriate caveats, we believe it is early enough in the year that any temporary near-term impacts on economic activity should largely be worked out in the back half of the year, leaving full-year expectations largely unchanged.”
Regarding the medium-duty markets, he commented, “Similar to Class 8, to find a higher Classes 5-7 inventory-to-retail sales ratio, we have to travel back to November of 2010, the point just before GM wrote off their entire MD inventory after ceasing production in mid-2009. In January, falling sales, at a three-year low, and rising inventory boosted the seasonally adjusted IN/RS ratio to 3.8 months.”
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
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