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ACT Research: October Class 8 Orders Driven by Segments with Pent-Up Demand

November 20, 2023, 07:20 AM
Filed Under: Trucking

While strong relative to freight market conditions, Class 8 orders were down 24 percent y/y in October, as published in ACT Research’s latest State of the Industry: NA Classes 5-8 report.

According to Kenny Vieth, ACT’s President and Senior Analyst, “Final Class 8 net orders were 32,287 units in October, with the largest drivers of orders being market segments with lingering pent-up demand.”

The vocational straight truck market saw orders rise 24 percent y/y. Export market orders were up 91 percent y/y, and orders destined for the Mexican market were up a whopping 187 percent. Moving in the opposite direction, North American Class 8 tractor orders were down 34 percent y/y, with US-only tractor orders down 47 percent from year-ago levels.

“The build rate declined nearly 10 percent m/m, leading to 27,999 units of production in October. Anecdotes suggest supply chain issues were at the root of the below-expectations miss. Despite otherwise softening conditions, Q1’24 build expectations remain elevated,” he added. “Class 8 build and retail sales continue to track closely, but retail sales ticked down this month, causing inventory to move higher. Classes 5-7 inventories remain elevated, on pre-strike stocking and as medium-duty bodybuilders’ labor challenges persist.”

Vieth concluded, “For carriers, the long bottom in freight rates continues, with spot rates little changed since April. A big driver of rate weakness has been lagged private fleet capacity additions. As for-hire fleets tend to be the first buyers in line, private fleets have been the drivers of Class 8 market strength in 2023, adding equipment at the bottom of the cycle and prolonging the rate pain.”

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