ACT Research: Net Class 8 Orders Nearing ‘Best Ever’ Status

According to ACT Research’s latest State of the Industry: NA Classes 5-8 Report, net Class 8 orders booked during the past six months have only previously been surpassed by the six-month period ending October 2018.

“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,” Kenny Vieth, president and senior analyst for ACT Research, said. “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 said, “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, Vieth said, “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.”

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