July trailer orders up 134 percent, says ACT Research

Commercial trailer orders continued their strong rebound in July compared to a difficult 2009, according to data from ACT Research, a provider of data and analysis for trucks and other commercial vehicles.

ACT said in its most recent edition of “State of the Industry: U.S. Trailers” that dry van trailers in July were up 134 percent year-over-year, while net orders in July—at 10,688—were 9 percent below June levels.

ACT said this sequential decline is due in large part to normal seasonality of new orders, noting that the last six months of commercial net trailer orders are the best six-month span since the six months ending February 2008. The firm also pointed out that the backlog of trailer orders from June to July increased for the first time since February 2008.

“While the decline from June to July may appear disappointing, the overall direction of the commercial trailer sector continues to improve,” said Kenny Vieth, partner and senior analyst with ACT Research. “However, it should also be noted that these gains are coming off a very weak 2009 and, like the commercial truck sector, net orders have yet to reach normal replacement levels,” added Vieth.

Earlier this month, ACT released its “ACT North American Commercial Vehicle Outlook,” which called for commercial trailer production to increase by 47 percent to about 116,000 year-over-year and full-year production of Class 8 vehicles to be up 26 percent year-over-year at about 150,000, with further increases into 2011.

Vieth said in a recent interview that while truckers had a strong second quarter, it creates a question of if that performance is indeed sustainable.

“We still have below replacement [level] retail sales for Class 8 vehicles,” said Vieth. “There is still capacity coming out of the market that way. And we are still seeing fairly healthy exports of used Class 8 trucks out of the marketplace, which is another avenue for lowering capacity, and we are seeing slower economic growth as opposed to contraction at this point, with a possible double-dip recession in the future.”

Unless a double-dip actually occurs, even an incrementally growing economy is still going to absorb capacity, said Vieth. And the ACT 2010 forecast—and into 2011—remains at below replacement levels for expectations of commercial vehicle manufacturing. This suggests that truckers should be able to build on the momentum that they started to gain in the second quarter, although it may not be as robust as it could have been if the economy were continuing to grow at the pace it did during the first half of the year, according to Vieth.