ACT: Heavy Duty Market Anticipating Build Rate Pullback

According to ACT Research’s latest North American Commercial Vehicle OUTLOOK, expectations for the Class 8 and trailer markets anticipate an accelerating pullback in build rates, as freight market conditions remain at a low ebb. While less cliff-like, medium duty market indicators continue to support a modest correction into 2020.

“They say a picture is worth 1,000 words, and one of our favorites is an overlay of the 12-month moving average of Class 8 net orders and actual production data,” said Steve Tam, ACT vice president. “As 20 years of history show, where the order trend goes, build follows, and positively, a turn in the 12-month moving order average can be seen as starting in December, meaning Class 8 orders in 2020 should handily outperform 2019.”

Tam added, “On the downside, we would note that every trough in the order average in the past 20 years has been met with a corresponding drop in builds.”

Regarding heavy vehicle demand, he noted, “Despite a high-side production surprise in September, large new inventories and deteriorating freight and rate conditions keep us cautious into the end of 2019.”

Regarding ACT’s medium duty forecasts, Tam said, “Preliminary October net orders for this market segment slowed to their lowest level since July of 2016, and the drop appears to be a signal that medium duty vehicle buyers are stepping back from the torrid pace of demand the space has enjoyed over the past year and a half.”

Like this story? Begin each business day with news you need to know! Register now for FREE Daily E-News Broadcast and start YOUR day informed!

Leave a comment

View Latest Digital Edition

Terry Mulreany
Subscriptions: 800 708 9373 x130
Susie Angelucci
Advertising: 484.459.3016

View Latest Digital Edition

Visit our sister website for news, information, exclusive articles,
deal tables and more on the asset-based lending, factoring,
and restructuring industries.