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Modern Heavy Trucks At Truck Stop
Modern Heavy Trucks At Truck Stop
Modern Heavy Trucks At Truck Stop
Modern Heavy Trucks At Truck Stop
Modern Heavy Trucks At Truck Stop

Another indicator points to trouble in Class 8 truck market

June 29, 2022
ACT Research Class 8 Tractor Dashboard dropped again in April, confirming 'steady and steep erosion in prospective business conditions for Class 8 tractors,' according to the industry analyst.

A key indicator seen by trucking industry analyst and forecaster ACT Research shows trouble in the Class 8 tractor market that ACT predicts will last through the end of this year.

Released recently as part of ACT’s Transportation Digest, the top line on the report’s Class 8 Tractor Dashboard dropped again in April. The report, which combines proprietary ACT data and analysis from a variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets, according to a release from ACT.

See also: Class 8 orders level as OEMs fight supply constraints

“The Tractor Dashboard result affirms the steady and steep erosion in prospective business conditions for Class 8 tractors that has been the rule through calendar year 2022. It is the first time the index has strayed into negative territory for two consecutive months since the COVID recession in April and May of 2020,” said Kenny Vieth, ACT’s president and senior analyst.

“Looking at underlying row item behavior, we see sustained adverse trends in the macro and financial lines (consumer goods spending and the Dow Jones trucking stocks trends), freight indicators (now almost all negative readings), ACT’s Class 8 orders-to-build, and the ACT For-Hire Index (our proprietary fleet survey).”

Vieth concluded, “The broad sweep of negative row items, and the sizable erosion from December 2021 to April 2022, a net loss of 14 in the top line tally, all suggest that headwinds for Class 8 tractors will be increasing as we move though the second half of the year.”

This monthly report is designed as a quick look at transportation insights for use by fleet and trucking executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium-duty segments, the U.S. trailer market, used truck sales information, and an overview of the U.S. economy.

Class 8 orders at 2022 low

Preliminary data earlier this month from both ACT and FTR Transportation Intelligence showed Class 8 orders dropping to their lowest level since November 2021.

Class 8 truck and tractor orders slipped in May to their lowest in six months due to ongoing supply chain concerns and a predicted annual dip heading into summer, according to the two commercial vehicle market research firms that each released preliminary data in early June.

North American Class 8 net orders totaled 13,300 in May, which represents a 13% decrease compared to April and a 43% decrease from May 2021, according to the preliminary data from FTR. ACT measured May orders at 14,000 units. Class 8 orders have totaled 270,000 units over the last 12 months, a monthly average of 22,500.

See also: Truckload, reefer volumes slip in May, DAT reports

The first quarter of the year saw little variation in the number of heavy-duty truck orders, with numbers hovering around 21,000 per month, but activity has slowed leading into summer, “when orders tend to be seasonally weak,” Eric Crawford, ACT’s vice president and senior analyst, noted. “OEMs typically have yet to open their forward-year build schedules, as is currently the case for 2023.”

ACT analysis notes that because Class 8 backlogs stretch through 2022, OEMs have taken a conservative approach to heavy-duty orders, looking to limit the overbooking and underbuilding that hurt the industry last year.

Supply chain issues had improved in previous months, but “some of that progress stalled due to disruptions in China and Russia,” said Don Ake, FTR vice president of commercial vehicles. “The OEMs are not confident they can increase production in the second half of the year; therefore, they are not able to take more orders.”

About the Author

Scott Achelpohl | Managing Editor

I'm back to the trucking and transportation track of my career after some time away freelancing and working to cover the branches of the U.S. military, specifically the U.S. Navy, U.S. Marine Corps, and the U.S. Coast Guard. I'm a graduate of the University of Kansas and the William Allen White School of Journalism there with several years of experience inside and outside business-to-business journalism. I'm a wordsmith by nature, and I edit FleetOwner magazine and our website as well as report and write all kinds of news that affects trucking and transportation.

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