According to ACT Research’s (ACT) latest release of the North American Commercial Vehicle OUTLOOK, expectations for the Class 8 and trailer markets anticipate an immanent pullback in build rates, as market conditions continue to deteriorate.
ACT Research released the September installment of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report covering the truckload, intermodal, LTL and last mile sectors.
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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.
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.”
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.
New US trailer orders of 13.9k were up 22% month-over-month, and after accounting for cancellations, net orders of 10.3k hit their first sequential increase in nine months, rising 64% from June. Year-to-date, however, net trailer orders are 46% below last year, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailer Report.