According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, April Class 8 net orders pulled back to a seven-month low, with benign cancellations. ACT Research attributes the order pullback not to any slowing in demand, but a reflection that the 2021 backlog is essentially filled.
ACT’s State of the Industry: NA Classes 5-8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders, and retail sales. Additionally, Class 5 and Classes 6-7 are segmented by trucks, buses, RVs, and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs. This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package. A first look at preliminary net orders is also published in conjunction with this report.
“As we’ve said for some time, commercial vehicle demand is hot, but supply chain problems persist,” said Kenny Vieth, resident and senior analyst, ACT Research. “Since the end of last year, ACT has been reporting that the 2021 question is not one of demand, but rather supply. The freight economy continues to enjoy broad-based strength, evident in freight rates that caught fire last July and have remained at or near record levels for months. With freight rates at current levels, carrier profits are soaring. Finally, jammed ports, inventory restocking, and persistently tight driver capacity suggest that the current freight and profitability landscape has legs, giving truckers the confidence to buy equipment.
“While demand is as strong, or stronger, than it has ever been for both medium and heavy duty vehicles, the industry’s ability to tackle that backlog has been beset by a series of issues that have thrown roadblocks in front of its ability to turn orders into trucks, including chip shortages, steel output, and plastic resin availability,” Vieth said. “Capacity to produce Class 8 vehicles this year essentially is full, and using 2018 as a guide, we would expect OEMs to begin opening 2022 order books in June and July. Broad-based economic strength continues to build the best medium duty market since ACT began reporting data, with the order trend eclipsing the prebuy-fueled market of 2006.”