Trucking: ACT says Class 8 backlog improvement streak is snapped
August 18, 2011
June brought an end to nine straight months of Class 8 commercial vehicle backlog improvements, according to data from ACT Research, a provider of data and analysis for trucks and other commercial vehicles.
ACT officials said that while demand and freight growth are positive, current economic events have impacted demand. And they added that ACT’s North American Commercial Vehicle Outlook reported that June’s backlog decline was due to an easing in orders, noting that while economic weakness has not brought about more order cancellations, build rates also fell in June.
“The U.S. economy is growing at a very slow pace, and is more susceptible to shocks, both internal and external,” said Sam Kahan, ACT’s chief economist, in a statement. “We’ve reduced our estimate of future economic growth, which results in a reduction of our Class 8 projections for this year as well as 2012. Even though long-term demand factors continue to be solid, the economic pressures in the short and intermediate terms cannot be overlooked.”
This decline continues a slowdown that has been occurring since a big order intake in April, caused by some artificial things that were starting to pull demand ahead, said Steve Tam, vice president-commercial sector at ACT, in a recent interview. Among these “artificial” things are signals from truck OEMs that price increases for parts and components is coming, with discounting starting to cease as pricing is returning their way.
These things all manifested themselves in the form of some type of a price increase, with truckers looking to buy equipment doing so in April, according to Tam.
“Truckers are creatures of habit so their capital investment cycle follows a fairly predictable pattern, which helps us gauge what is going on,” said Tam. “We can expect to see orders remain down at this lower level through at least September and probably October.”
Subscribe to Logistics Management magazine
entire logistics operation. Start your FREE subscription today!