Preliminary North American Class 8 net orders rose in February for the first time in five months, according to two research firms that analyze and track commercial vehicle activity. After setting record highs in September, steady monthly declines in orders rebounded in February, potentially moving fleet equipment ordering back into steadier activity.
FTR Transportation Intelligence’s initial numbers pegged heavy-duty truck orders at 22,800 units. ACT Research’s preliminary February total was 23,600 Class 8 orders. After the two firms’ data differed by more than 3,000 orders in January, their initial reporting fell closer in line this past month.
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FTR’s initial analysis shows a 13% increase in Class 8 order activity over the previous month, while ACT’s figures are up 27% month-over-month. Year-over-year, Class 8 orders are up 10%, according to FTR, which reported 303,000 Class 8 units were ordered over the last 12 months. ACT is seeing a 13% increase year-over-year.
“Orders likely are below build rates for the month, and FTR would anticipate backlogs to slip slightly,” according to Eric Starks, FTR chairman. “However, backlogs remain at high levels and production slots are mainly filled through Q3 of this year. As such, the February performance is a good sign for the industry as fleets continue to order equipment.”
February’s orders represent substantial order activity, which FTR suggested could stabilize in the low 20,000-unit range. Order activity over the last six months has been vigorous at an annualized rate of 413,000 units, according to the firm.
Cautioning that ACT does not forecast orders, the firm expects 15,000 to 20,000 orders per month “in the near term” after a robust end to 2022, according to Eric Crawford, ACT VP and senior analyst. “Thus, February’s [net orders of] 22,400 represents a modest upside to our expectation. Combined with January, [net] orders have averaged 19,700 units year-to-date.”
Both firms expect to finalize their February order numbers by mid-March.
“Over the past year, total net orders reached 303,000 units,” FTR’s Starks noted. “In any market, this is a strong number. However, given the uncertainty in the economy, this is an especially welcome sign that demand has not collapsed and that fleets still have access to capital.”
Used truck sales
Used Class 8 retail volumes (same dealer sales) increased 12% month-over-month in January, according to ACT, which released its used truck sales figures on March 1. Average mileage of that used equipment increased 8% month-over-month, with the average price down 7% and age up 1%. Longer term, average price and volumes were lower, with age and miles higher compared to the same period in 2022.
“Same dealer Class 8 retail truck sales saw a second month of sequential gain in January, up 12% from December,” said Steve Tam, VP at ACT Research. “Sales typically see a moderate decrease (≈7%) in January, so the increase was a departure from seasonality. However, expectations called for the disconnect. The assumption was based on strong new truck sales in November and December, which helped to relieve some of the pent-up demand the used truck market suffered through most of 2022.”
As the secondary market tightens, Tam said it would be interesting to see those truck owners who were selling their own equipment turn back to dealers and auctions to handle transactions.
“While participating dealers reported a 12% month-over-month increase in sales, we estimate the total industry saw about a similar decline in sales,” Tam said. “Many in the industry are voicing concerns about the health and viability of owner-operators and small fleets, particularly as freight rates fall and operating costs rise. While the economy may avoid a recession, inflation remains a very real concern. With that in mind, we expect the market to fall as much as 10%.”
See also: Small fleets, owner-operators struggle living off current spot market
Medium-duty sales
In medium-duty sales, which is how ACT categorizes Classes 5 to 7 vehicles, preliminary net orders were 17,500 in February, according to the research firm.
“Medium-duty demand took a modest step down,” according to ACT’s Crawford. “February Classes 5-7 orders declined 11% year-over-year (down 2% month-over-month) to 17,500 units. The seasonally adjusted February intake, at 16,400 units, declined 12% year-over-year (down 9% month-over-month).”
