Class 8 truck orders on the rise, according to ACT and FTR

Data published by ACT Research, a provider of data and analysis for trucks and other commercial vehicles, and freight transportation forecasting firm and consultancy FTR Associates indicated that preliminary data for Class 8 trucks is showing signs of very positive growth.

ACT noted that preliminary net orders in November for heavy-duty Class 8 vehicles in North American markets hit 26,300 units.

Should this estimate stay in its current range, it would top October’s 18,914 net orders as the best net order month for 2010. ACT said a final order tally for November would come in later this month. The firm added that preliminary net order numbers are subject to revision and are typically accurate to within 5 percent plus or minus.

“The surge in net orders was significant and adds further confirmation to the forecast we have had for the last year that 2011 would see a healthy rebound in Class 8 production,” said Kenny Vieth, ACT president and senior analyst, in a statement.
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.
And FTR reported that its preliminary data for Class 8 trucks shows that orders for North American OEMs came in at 26,005 units for a 38 percent increase over October, as well as being the highest monthly order level since May 2006 and the fourth straight month over month increase in orders.

“We were expecting a normal seasonal increase in orders to a level between 22,000 and 25,000 units,” said FTR President Eric Starks in a statement. “The November number came in slightly above those expectations. This can be chalked up as a win for the industry.  The fact that truckers are willing to start ordering equipment is certainly a good sign.”

Starks added that it is clear that we are in a recovery period for the new truck equipment market, but he cautioned there are still concerns regarding the durability of the current surge. He explained that leasing companies and large fleets were instrumental in pushing the orders higher but smaller and medium size fleets are participating at the levels typically expected during a recovery. And until this group jumps back into the market the overall outlook for truck buying and ordering will continue to be optimistic, but with a degree of caution. Starks also said that the recent numbers have not changed FTR’s view on the direction of the new equipment market for 2011.

Even though Class 8 orders are still up, they are still below typical replacement levels, as many carriers in recent years have been more inclined to hold onto assets longer due to a lack of demand which occurred during the recession.