Presently, there is an immediacy in industry data analysis that is rare. With August order and build volumes pushing backlogs to their annual nadir (and multi-year lows), “order season” has not been so important since the fall of 2016. Excessive inventories cloud both the front and back ends of the demand arc, as published in the latest release of the North American Commercial Vehicle OUTLOOK.
“A year ago, the total Class 8 inventory was 61,800 units. At the end July 2024, the Class 8 inventory was a record 88,800 units, an increase of 27,000 units y/y. The increase has not been supported by demand, pushing stocks significantly above an inventory-to-retail sales inferred level,” according to Kenny Vieth, ACT’s President and Senior Analyst. “The same exercise works in the MD market as well. From a near-record 77,800 units in July 2023, July 2024-ending stocks had risen to a new record 101,900 units, an increase of 24,100 units y/y.”
Vieth concluded, “We are sitting in the lull before a hoped-for sustained surge as ‘order season’ gets underway. September is the month in which seasonal factors flip from accretive to dilutive, though September’s factors are modest. The ‘season’ gets underway in earnest starting in October. While inventories are ultimately a headwind, the path of orders is foundational at this juncture: backlogs are low, and BL/BU ratios for Class 8 and trailers indicate unsustainable production levels relative to backlog support. Strong orders in Q4 and into Q1 are imperative.”
NA CV Forecast Report Overview
The NA CV forecast reports on the trucking industry forecast, providing a status of commercial vehicle demand, tactical and strategic market analysis and forecasts ranging out five years. The report’s objective is to give OEMs, suppliers, investors, and other interested market participants the information they need to make informed decisions in what is traditionally a deeply cyclical market. The report provides a complete overview of the North American markets, touching on relevant demand drivers starting with forward-looking activity metrics, orders and backlogs. Information included in this report covers build and retail sales forecasts and current market conditions for medium- and heavy-duty trucks/tractors, and trailers, North American macroeconomics by country, freight and carrier market performance, used equipment valuation trends, and regulatory environment analysis and impacts.
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
ACT marks 2025 expectations for medium-duty and heavy-duty trucks down sharply this month, even as 2024 forecasts push higher. The biggest driver of Classes 5-7 and Class 8 2024–2025 forecast changes are driven by excessively strong build relative to retail sales that have led to sharp inventory gains, as published in the latest release of the North American Commercial Vehicle OUTLOOK.
“The forecast changes are driven by across-the-board stagnant, and in some cases worsening, fundamentals,” according to Kenny Vieth, ACT’s President and Senior Analyst. “At calculated levels, Classes 5-7 and Class 8 inventories are at record levels. Industry backlogs are increasingly consumed. Private fleets have taken around 6% market share from for-hire carriers since early 2023, leaving the for-hire market swimming in capacity despite rising freight volumes. For-hire carrier profitability remained at generationally low levels in Q2’24. And among other factors, with elections and Fed rate cuts inbound, corporate decision making is likely to be increasingly defensive into the fall season.”
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