After last month’s anomalous order number, June’s activity offers a more reflective view of current market conditions, as published in ACT Research’s latest State of the Industry: NA Classes 5-8 report.
Final North American Class 8 net orders totaled 14,604 units in June (18.2k seasonally adjusted), down 13% y/y as we move through the weakest period of the year for orders.
“The Class 8 backlog fell 15,516 units m/m in June to 127,917 units. With two fewer production days, June’s build rate increased to an incredibly strong 1,609 units per day,” according to Kenny Vieth, ACT’s President and Senior Analyst. “Given where we are on the calendar, stronger build than orders should continue to push the backlog lower in the coming months.”
Regarding inventories, Vieth added, “A plant fire in April that caused the red tagging of numerous units continues to require some reading between the lines when it comes to Class 8 inventories. On ACT’s calculated basis, the Class 8 inventory rose to an all-time high close to 92,500 units in June, versus the 85,400 units reported. Our calculated inventory surpasses August 2019 on the ‘we’ve got an inventory problem’ list.”
Vieth concluded, “Class 8 retail sales were 24,267 units, or 22.8k seasonally adjusted, down 19% y/y. The decline was more than covered by tractors, which fell 26% y/y, even as vocational units held their own, rising 2.7% y/y. On that seasonally adjusted basis, June’s retail number was the weakest since February 2022, back when supply chains were constraining the market.”
State of the Industry: NA Classes 5-8 Report Overview
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 Overview
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.
Additional Resources
June preliminary North America Class 8 net orders were 14,800 units, down 37% m/m and 12% y/y. Complete industry data for June, including final order numbers, will be published by ACT Research in mid-July.
“Even in good years, Q2 typically delivers below-trend orders, while Q4 orders can trigger optimism at the bottom of the cycle. With the long bottom in freight volumes and rates continuing in the most recent data from DAT amid lingering market overcapacity, for-hire carriers’ financial performance has been dismal,” shared Kenny Vieth, ACT’s President and Senior Analyst. He continued, “Entering the historically worst time of the year for orders at the bottom of tractor buyers’ profitability cycle is producing results in line with expectations. At the same time, the brightest spot in the economy has been consumer services spending, helping to support steady medium-duty truck demand.”
Regarding medium duty orders, Vieth added, “Reflecting underlying service sector strength, NA Classes 5-7 net orders were 19,000 units in June, down 1.6% m/m, but up an in-line 3.3% y/y.”
Class 8:
Net Orders: 14,604, -13% y/y
Backlog: 127,917 units, -15,516 units m/m
Inventory: 92,500 units
Retail Sales: 24,267 units, -19% y/y
Click here to learn more information about ACT's State of the Industry: NA Classes 5-8 Vehicles data.
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