North America Class 8 net orders came in at 53,069 units in August, making for another record-setting month. It also marks the sixth time in eight months NA Class 8 net orders topped 40,000 units, according to ACT Research.
“Robust orders in June and July were largely attributed to dealers booking orders for their non-national account customers, as well as for stock units in the first half of next year,” said Kenny Vieth, president and senior analyst. “Early indications are that large national account orders began to flow earlier than usual in August. With the backlog stretched to 10 months, fleets are racing to get into the queue in what is arguably the best-ever period in history for carrier profitability. Coupling record orders with the industry’s bumpy production ramp, the Class 8 backlog rose to record heights in August, climbing to 280,710 units, and given the current order frenzy, a 300k-plus backlog seems achievable.”
Last month was not only a record-breaking August, it also broke an all-time order record, coming in just over last month’s briefly held record of 52,629 units. Comparatively, August 2017 orders came in at 21,213 units, according to Vieth.
Month-over-month, orders are up 0.8 percent. Year-over-year, orders are up 150 percent, according to Vieth. Over the past 12 months, NA Class 8 net orders have totaled 483,000. The last all-time record goes to production year 2006, which saw 376,400 units.
“The market is on fire, no matter how you measure it. It hasn’t just been July and August, June was a pretty hot month as well,” Vieth said. “There’s a lot of capital sloshing around the U.S. economy right now. In the trucking industry we have strong demand created by the economy, and we have constrained supply, thanks in part to the ELD mandate.”
This string of record-breaking months may not slow down considerably anytime soon. J.D. Power Senior Analyst Chris Visser predicted the current new truck cycle would remain hot for at least two more quarters.
“The last time orders dramatically increased over a multi-month period was late 2014, with orders peaking at just under 46,000 units. In following months, actual deliveries increased to slightly over 25,000, then delivered rather quickly,” J.D. Power’s August Commercial Truck Guidelines industry update stated. “Today, orders have crested 52,000 units, but deliveries are struggling to hit 23,000. If we assume economic and regulatory factors have created a need for roughly 50 percent more trucks today versus 2014, actual need should be 37,500 units per month.”
Those calculations mean OEMs still have a significant amount of headroom before they begin meeting demand.
J.D. Power is forecasting more new truck deliveries in the coming months, but demand is still expected to outpace supply into the second quarter of 2019.
