Preliminary NA Class 8 net orders in July were 20,300 units, rising 27% from June, and up 98% from a very easy year-ago comparison. The NA Classes 5-7 market saw orders slip to 16,700 units, down 6% month-over-month and 3% below their year-ago July volume. Complete industry data for July, including final order numbers, will be published by ACT Research in mid-August.
ACT’s State of the Industry: Classes 5-8 Vehicles 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 activity-related 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. The Class 8 market is segmented into trucks and tractors, with and without sleeper cabs. The report includes a six-month industry build plan, a 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.
“Preliminary data show that July orders for medium- and heavy-duty vehicles jumped to a six-month high,” said Kenny Vieth, ACT’s President and Senior Analyst. He continued, “Less than a week ago, we learned that the US economy was 9.5% smaller in Q2 than it was in Q1 and 10.6% below its end of 2019 level.” Vieth further explained, “Additionally, when the COVID began to bite in late February, there was a strong case to be made that the trucking industry was suffering from lingering overcapacity that was still putting downward pressure on freight rates, and by extension, carrier profitability.”
Relating these facts to the North American heavy-duty market, Vieth said, “The context of rising rates and improving carrier profits adds perspective to what is now occurring in Class 8 orders: Supply matters. With many drivers (and trucks) sidelined, there is now insufficient available capacity for rebounding freight volumes. There is a strong relationship historically between carrier profits and equipment demand.”
Regarding the medium-duty market, Vieth commented, “Unlike Class 8, the medium-duty market did not swoon sharply through the worst of the shutdown. And, while orders were down on a nominal basis, seasonal adjustment boosts July’s Classes 5-7 orders to a five-month high.”
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.
ACT’s 63rd seminar is scheduled for August 11-13, 2020, and is being offered via livestream for those wishing to participate. Focused on the road to recovery from the COVID-19 pandemic, the event will feature dealer, alternative power, and economic panels, as well as discussions on near-term demand of North American commercial vehicle markets and the pending impact of alternative power on the market in the near future.
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