ACT: October Classes 5-7 and 8 Net New Orders Muted

The latest State of the Industry report from ACT Research revealed that there were 25,900 net new orders of Class 8 trucks in October, while Classes 5-7 posted 21,900 net orders.

“Whether one subscribes to the theory that both economic and industry woes have resulted in excess inventories that are currently correcting or the theory that weakening growth is more permanent in nature and will persist, the results are the same. Many in the industry have curtailed 2016 planned activity,” said Steve Tam, ACT’s vice president in the commercial vehicle sector, while noting that developments in the economy and industry continued to evolve in October, doing little to add any degree of clarity to a confounding situation. “Class 8 net orders failed to wow in October. Historically, a number of factors converge to send orders nearly 15% above average.” He continued, “That said, orders did increase 34% month-over-month, but at a lower absolute level than previously expected. And, the mismatch between order intake and build has resulted in a backlog drain that is now entering its eighth consecutive month.”

Concerning medium duty, Tam said, “Orders were equally as unimpressive for the Classes 5-7 market in October, though expectations were not quite as high as for the Class 8 market. Sequentially, demand dropped about 1%. Cumulatively Class 5 is up more than 11%, while Classes 6-7 are holding steady, down less than 1%. Slowing in state and local government and municipality purchases accounted for much of the lower Classes 6-7 demand.”

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