The latest orders in Class 5-7 have slowed, according to ACT Research Co. The firm reports that Class 8 booked 25,900 net new orders in October, while Classes 5-7 posted 21,900 net orders.
The numbers were reported in the latest State of the Industry report.
“Whether one subscribes to the theory that both economic and industry woes have resulted in excess inventories that are currently correcting or the theory that weakening growth is more permanent in nature and will persist, the results are the same. Many in the industry have curtailed 2016 planned activity,” said Steve Tam, vice president-commercial vehicle sector. “Class 8 net orders failed to wow in October. Historically, a number of factors converge to send orders nearly 15% above average.”
Tam did note that orders were up 34% month-over-month, but still at a lower level than expected. “And, the mismatch between order intake and build has resulted in a backlog drain that is now entering its eighth consecutive month,” he said.
In Classes 5-7, Tam said the results were “equally as unimpressive,” although expectations were not as high as those for Class 8.
“Sequentially, demand dropped about 1%,” he said. “Cumulatively, Class 5 is up more than 11%, while Classes 6-7 are holding steady, down less than 1%. Slowing in state and local government and municipality purchases accounted for much of the lower Classes 6-7 demand.”