According to ACT Research’s latest State of the Industry: NA Classes 5-8 report, there has been little change in the trajectory of macro datapoints influencing commercial vehicle demand. Except for the asterisk that is the COVID-19 Delta variant, economic strength is broad-based and concentrated in goods-related economic activity; however, Class 8 build rates tumbled in July.

“Historically, strong orders starting in Q4, the accumulation of large backlogs and growing lead times [BL/BU ratios] are a recipe for production rising sharply at this point in an industry up-cycle,” Kenny Vieth, president and senior analyst of ACT Research, said. “There are growing pains at the start of every cycle as the supply chain lurches unevenly into higher build rates, but this pandemic recovery cycle has been beset with extraordinary global issues that have amplified traditional ramp-up challenges from steel supplies to domestic staffing to semiconductors. The Class 8 market saw build rates take a big step backward in July, as OEMs took down days and weeks to compensate for component shortages, especially semiconductors. During the month, Class 8 production fell to a 15-month low, as build per available day dropped materially below trend.”

Regarding the medium-duty segment, Vieth said, “Classes 5-7 production also took a step back in July, but that step was more orderly and in line with expectations. Like Class 8, the medium-duty decline was also the lowest since May 2020’s COVID-shutdown-related output. Additionally, we have heard/read that the heavy-duty OEMs are taking semiconductors away from their medium-duty products to maximize the value of the chips. Some large players in the MD space are doing the same thing, using chips that would have been destined for cars and pickups to maintain Classes 5-7 output.”