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Strong Economic Activity and Capacity Constraints Impacting CV Markets

June 17, 2021, 05:38 AM
Filed Under: Trucking

According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, data through the first two weeks of June suggest that North America is at or very near the top of the freight rate expansion, which has been setting new highs on an almost monthly basis since last August. While at or near the peak in terms of freight rates, the economic outlook is optimistic in anticipation of an extended runway of strong activity.

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 has been the case since the start of the year, supply-chain constraints, rather than fleet/consumer demand, will be the primary determinants of how many vehicles are produced this year,” said Kenny Vieth, ACT Research’s President and Senior Analyst. He added, “While the list remains long, build expectations suggest that work-throughs are coming into place. For example, the semiconductor situation is not expected to be fully rectified by the end of 2021, but reports suggest improvement from here, as chip supplies are reallocated to higher-value goods producers. And while spot Midwest steel prices posted a new record high in early June, they have leveled off since, which is perhaps an early indication that supply is finally catching demand.”

By commercial vehicle segment, Vieth commented, “May’s Class 8 data showed no real surprises. Orders aligned with preliminary reporting, build and backlogs were close to expectations, cancellations continued to border on nonexistent, and inventories and sales were consistent with recent levels. Additionally, broad-based economic strength continues to build the best medium-duty market since ACT began reporting data. In May, 3-, 6- and 12-month order metrics (3 and 6 seasonally adjusted) all rose to best-ever levels, eclipsing the prebuy-fueled volumes of 2006.”

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