Preliminary NA Class 8 net orders bounced back in May with 15,500 units, up 10% y/y (+29% m/m), while preliminary Classes 5-7 surged 27% y/y with 19,000 units (+3% m/m). Complete industry data for May, including final order numbers, will be published by ACT Research in mid-June.
“Given robust Class 8 orders into year end and the ensuing backlog support, coupled with normal seasonal order patterns, orders were expected to moderate into Q2 and remain at relatively soft levels into mid-Q3’23. May orders were in line with this view,” shared Eric Crawford, ACT’s Vice President and Senior Analyst. “The relatively few build slots still free in 2H’23 suggest order intake is unlikely to find meaningful traction in the coming months.”
He added, “Medium-duty demand surged 27% higher y/y to 19,000 units (+3% m/m), reversing course after three straight months of y/y declines. The seasonally adjusted May intake, at 20,600 units, increased 28% y/y (+11% m/m).”
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.
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Given the relatively weak environment for orders, combined with a fairly healthy supply chain, Class 8 backlog should be on a downward trajectory until 2024 orderboards open. April was no exception, with backlog down 15.1k units m/m to 203.1k, according to ACT Research’s May release of the State of the Industry: NA Classes 5-8 report.
According to Eric Crawford, ACT Research’s Vice President, Senior Analyst, “As supply conditions have improved, so has output. Evidencing this trend, heavy-duty and medium-duty production each exceeded build plans (again) in April. The Class 8 build rate in April was 1,384 upd, 6% above industry build plan. The industry produced 26,302 Class 8 units across April’s 19 production days. Classes 5-7 build averaged 1,192 upd, 13% above build plan. April’s build rate was the highest in nearly four years (since August 2019). The industry produced 22,650 units across April’s 19 build days.”
Regarding sales, he noted, “Heavy-duty and medium-duty retail sales remain robust, and each rose double digits y/y in April. The heavy-duty unit per day rate, 1,431 seasonally adjusted, was its highest in nearly four years, and the medium-duty rate, 1,009 seasonally adjusted, was its highest in 18 months.”
Crawford concluded, “We expect positive momentum to slow in 2H’23, as the impact of prior Fed rate increases takes hold (and additional rate increases may still be yet to come), and the cumulative impact of depressed freight rates over an extended period weighs on pent-up demand.”
Preliminary May HD Net Orders: 15,500 units (+10% y/y)
Preliminary May MD Net Orders: 19,000 units (+27% y/y)
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