October Class 8 Orders Driven Largely by Segments with Lingering Pent-Up Demand

While strong relative to freight market conditions, Class 8 orders were down 24% y/y in October, as published in ACT Research’s latest State of the Industry: NA Classes 5-8 report.

According to Kenny Vieth, ACT’s President and Senior Analyst, “Final Class 8 net orders were 32,287 units in October, with the largest drivers of orders being market segments with lingering pent-up demand.”

The vocational straight truck market saw orders rise 24% y/y. Export market orders were up 91% y/y, and orders destined for the Mexican market were up a whopping 187%. Moving in the opposite direction, North American Class 8 tractor orders were down 34% y/y, with US-only tractor orders down 47% from year-ago levels.

“The build rate declined nearly 10% m/m, leading to 27,999 units of production in October. Anecdotes suggest supply chain issues were at the root of the below-expectations miss. Despite otherwise softening conditions, Q1’24 build expectations remain elevated,” he added. “Class 8 build and retail sales continue to track closely, but retail sales ticked down this month, causing inventory to move higher. Classes 5-7 inventories remain elevated, on pre-strike stocking and as medium-duty bodybuilders’ labor challenges persist.”

Vieth concluded, “For carriers, the long bottom in freight rates continues, with spot rates little changed since April. A big driver of rate weakness has been lagged private fleet capacity additions. As for-hire fleets tend to be the first buyers in line, private fleets have been the drivers of Class 8 market strength in 2023, adding equipment at the bottom of the cycle and prolonging the rate pain.”

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.

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.