Seasonally Weak Orders, Recovering Supply Chains Enable Elevated Class 8 Production in June

According to ACT Research’s latest State of the Industry: NA Classes 5-8 report, June’s Class 8 backlog decline met expectations, as seasonally weak orders ran headlong into strong production. The Class 8 backlog fell by 14,000 units month over month to 175,200 units and the backlog-to-build ratio declined 80 basis points month over month to 5.9 months (6.6 seasonally adjusted). With 164,000 units scheduled for Q2/23 production, only 11,000 units of June’s backlog is sitting in 2024.

“Coupling the annual seasonally weak period of orders (typically April-August) and healthy supply chains enabling elevated production, the Class 8 backlog will be on a downward trajectory until 2024 orderboards open.” Kenny Vieth, president and senior analyst at ACT Research, said. “Traditionally, those out-year orderboards open in October, but in recent cycles, we have seen them open as early as August.”

Regarding June’s Class 8 build rate, Vieth said, “It was a healthy 1,406 units per day and represented the ninth month in the past 10 in which the build rate exceeded 1,300 [units per day]. The industry produced 29,905 units across June’s 22 build days.

“Class 8 orders rose 9% year over year in June with the final tally at 16,773. Adjust for typical dearth in summer order activity, seasonal adjustment lifts orders to 20,300 units. Meanwhile, end market demand in recent months has favored trucks over tractors. Tractor orders declined 1% year over year in June, while truck orders rose 28% year over year. Truck orders are experiencing strong tailwinds from federal legislation and manufacturing reshoring, which are boosting construction spending and spurring demand for vocational equipment.”

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