Net Class 8 orders booked during the past six months are “not quite as good as it gets yet, but awfully close,” according to ACT Research’s latest State of the Industry: NA Classes 5-8 Report.
The only sixth-month period that surpassed the current surge ended October 2018, ACT said.
“Unlike that October 2018 period, where the seeds of the cycle’s fall had already been planted with tariffs and trade wars, the economy is carrying considerable pent-up industrial and consumer demand with stimulus program(s) adding fuel to the fire,” said Kenny Vieth, ACT Research’s president and senior analyst. “ACT’s current expectation for GDP growth in 2021 is 6.4%. Owing to the composition of economic activity, ACT’s GDP-based freight proxy anticipates freight volumes jumping by 12.6%.
“That supplants 1984 as the best year on record, based on ACT’s freight composite methodology. While freight growth is expected to moderate, as consumer spending patterns begin to revert to more traditional levels of goods spending relative to services, both GDP and freight activity are expected to remain elevated.”
By commercial vehicle segment, Vieth noted: “With the economy growing in all the right places, freight rates and carrier profits are pushing into record territory. In response, Class 8 orders the past two quarters have driven rapid backlog growth. Stating the obvious, perhaps, the supply chain’s ability to respond will be the key determinant of commercial vehicle production in 2021.”
Regarding the medium-duty segment, he added: “While our Class 8 ‘best since’ comparisons go back to 2018, we have to go back to 2006 to find a comparable period for medium-duty demand.”
ACT’s 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.
More information is available at actresearch.net.