Net orders for Class 5-7 trucks officially topped 18,850 units in November, according to data crunched by ACT Research Co., while net orders for Class 8 trucks topped out at 16,700 units.
Lingering weakness in the industrial economy coupled with strong capacity additions in 2015 are tilting the supply-demand equilibrium in favor of shippers, noted Kenny Vieth, ACT’s president and senior analyst in a statement, helping drive down Class 8 net orders to lows last seen in in the third quarter of 2012.
By contrast, however, demand for medium-duty trucks remains robust, he said.
“Healthy consumer balance sheets, rising new home construction, improved state and local government budgets, and an absence of overbuying have the medium-duty segment well positioned for continued modest growth in 2016,” Vieth explained.
By ACT’s count, Class 5-7 net orders are up 5% year-over-year, with Class 6-7 net orders are up 10% – an uptick responsible for the lion’s share of medium-duty market gains last month, he noted.
W. M. “Rusty” Rush, chairman, president and CEO of Rush Enterprises, echoed a similar sentiment in a sit-down with reporters conducted earlier this week during the company’s annual technician skills rodeo.
“Class 4-7 sales are up for us,” he said. “Go back 12 years, and we didn’t even move 300 medium-duty trucks. But we’ve decided to be a bigger player in Class 4-7. We’re putting Hino and Isuzu operations inside our Navistar and Peterbilt [heavy truck] dealerships. Now we’re selling 10,000 medium-duty trucks.”
Ken Roemer, president of Paccar Leasing, noted that leasing demand for medium-duty models is especially strong as well.
“Especially in the medium-duty segment,” he said in a statement. “A third of all medium duty trucks are going into full-service leasing or rental and those numbers are spiking upwards.”
ACT Vieth’s added that, on the Class 8 side, while net orders of 16,700 units is “sharply below” the prevailing seasonally-adjusted order trend of 23,000 units on average per month average in place from April to October, overall Class 8 build well remain strong at over 320,000 units by the end of 2015.
“And while backlogs will be smaller at the end of 2015 versus 2014, that backlog is expected to be the third largest year-ending backlog in a decade,” he added.