ACT Research says Class 8 orders in November hit a new 2010 high

Data published by ACT Research, a provider of data and analysis for trucks and other commercial vehicles, said that November net orders of heavy-duty Class 8 vehicles at 26,268 units were up 38 percent from October.

October orders were up 24 percent from September, September orders were up 15 percent from August, and August was up 15 percent from July.

ACT said in its most recent edition of its State of the Industry: Classes 5-8 Vehicles that Class 8 net orders in November hit its highest monthly total in more than four years, adding that despite a healthy increase in the build rate by North American equipment manufacturers, the backlog of units to be built rose by more than nearly 10,000 units.

“The ramp up in orders over the past three months suggests that the barriers to increasing heavy duty demand are being surmounted, setting the stage for a healthy demand rebound in 2011,” said Kenny Vieth, ACT president and senior analyst, in a statement. “While the hurdles have been significant, the facts are that tight capacity and improving shipment volumes are allowing carrier profits to rise. And the fleet is as old as ever, so a portion of those profits are going to replace those aging trucks.”

In a recent interview with LM, Vieth said that based on ACT’s modeling and anecdotal evidence from truckers, it seems like the supply-demand imbalance, which has been tilted away from truckers for the last four years, has gone back to truckers, and it is not abating.

At current levels, Vieth said truck and trailer production is positioned to ramp up as fast as demand is. And with capacity still tight and current fleets aging in conjunction with a potential stretch of increased truckload earnings there could be some staying power for future truck production, he said.

In research published last week, ACT suggested that various factors are contributing to what could be a strong outlook for commercial vehicle demand in over the next few years.

Among the positive signs ACT points to for future demand include displays of stability and growth in freight-related segments of the economy as well as strong financial performances from publicly-traded carriers.

And according to ACT’s release of its ACT North American Commercial Vehicle Outlook, the firm said it projects full-year 2010 production of Class 8 vehicles to come in at roughly 152,000 units, representing a 29 percent annual gain, but still below normal replacement demand. ACT added that demand will head north in the next two years, with 2012 production moving past 300,000 units, and it also said that weak trailer growth will be on the mend with trailer production expected to hit annual growth rates of more than 50 percent in 2010 and 2011.