Researchers from a pair of trucking industry forecasting companies say Class 8 tractor orders for November plunged 59 percent from a year ago.
Figures released Wednesday by ACT Research show that at 16,600 units in November, North American Class 8 tractor net orders were nearly 60 percent lower than a year ago, following the same pattern as last month when Class 8 orders were off 37 percent year-over-year. A total of 35,300 Classes 5 through 8 truck orders were booked in November, which is down 26 percent from October and down 37 percent from November 2014’s outsized rate of order placements.
Meanwhile, analysts at FTR released preliminary data showing November 2015 North American Class 8 truck net orders at 16,475 — 59 percent below a year ago and the lowest level since September 2012.
FTR said this was the weakest November order activity since 2009 and was a major disappointment, coming in significantly below expectations. All of the OEMs, except one, experienced unusually low orders for the month. Orders are expected to be better, but not necessarily good, the next two months. Orders for the last 12 months are now annualized at 300,000 units.
“Unfortunately, little of the decline can be accounted for by seasonality,” said Steve Tam, ACT’s vice president of the commercial vehicle sector. “November was the weakest Class 8 net order month since August 2010 on a seasonally adjusted basis and September 2012 on an actual basis. A glut of inventory in the broader economy has led to slowing freight and lower freight rates. This, in turn, has caused truckers to hit the pause button on truck orders.”
Contrasting the Class 8 market, Tam said solid orders continued for medium-duty Classes 5-7 in November. For the month, medium-duty vehicle net orders were 18,700.
“More prevalent direct exposure to facets of the economy other than those that generate freight has allowed demand for medium-duty vehicles to remain more stable,” said Tam. “Despite falling 15 percent month over month, the year-over-year and year-to-date comparisons reveal growth in the mid-single-digit percentage point range.”
Don Ake, FTR’s vice president of commercial vehicles, said, “The November orders are very concerning. People were optimistic when orders held up well during the summer. Now we get into the peak order season and have the lowest orders of the year.
“The weak orders are the reason for the recent OEM announcements regarding production cutbacks and layoffs. Truck inventories are high and retail sales have stalled. The industry would appear to have enough new trucks for now. The manufacturing sector has sputtered and freight growth has slowed. Orders should stabilize soon, but backlogs will be shrinking, necessitating larger production cuts than were previously expected.”