According to ACT Research’s (ACT) latest State of the Industry: Classes 5-8 Report, Class 8 market-leading indicators continue to erode, in concert with deteriorating freight volumes and rates, even as mid and downstream data points remain robust.
“Ultimately, the current situation of weak orders and strong builds is unsustainable,” said Kenny Vieth, ACT Research’s President and Senior Analyst. He explains, “July orders conformed to traditional seasonal patterns, falling 80% year-over-year, while industry build posted its second strongest per-day rate since November of 2006. This order-to-build imbalance has caused backlogs to tumble since their October 2018 peak. Unfortunately, without a catalyst in sight, it is a trend that we expect to continue.”
Regarding the medium-duty markets, Vieth comments, “Medium-duty metrics remain in better balance, but there are signs of modest fraying, with orders below year-ago levels for a seventh consecutive month in July, the build rate accelerating, backlog falling, and inventories rising. While below the rate of build, retail sales continue strong.”