Used Truck Sales Drop, New Truck Orders Rise

JOC Staff | Feb 26, 2013 12:51PM EST

Sales of used Class 8 trucks dropped 3 percent year-over-year in January and were down 6 percent from December, according to ACT Research.

"It is now a buyer's market," said Steve Tam, vice president for the commercial vehicle sector at Columbus, Ind.-based ACT Research. 

"While one data point does not make a trend, longer term softness is in line with expectations, as new truck buyers have held onto their equipment longer before trading," he said.

"The net effect is older, higher mileage (used) trucks (for sale), which translates into lower prices," said Tam.

Auction and retail used truck sales dropped 11 percent in 2012, according to the vehicle market research firm, while the wholesale market increased volume 3 percent.

Orders for new heavy-duty trucks rose for a second straight month in January and remained above 20,000 for the fourth consecutive month, according to ACT.

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Net trailer orders in US improve in August: ACT Research

COLUMBUS, Ind. -- Net orders for trailers in the US improved in August, rising to 15,370 units, according to the latest results from ACT Research. Applying August’s seasonal factor brought the order total to 18,200 units.

“Looked at through a seasonal lens, August’s volume was the best since April,” said Frank Maly, director of commercial vehicle transportation with ACT Research. “While improved, annualizing August’s seasonally adjusted order volume generated a lacklustre 219,000 annualized rate of order intake. Orders on a seasonal basis below the build trend is an indication of fleets’ unwillingness to expand investment when the outlook is particularly opaque. Orders typically occur below the rate of build in Q3. Combined with slower economic activity and rising uncertainty, orders are expected to remain soft into Q4.”

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Class 8 net orders remain weak in September

NASHVILLE, Ind. -- The Class 8 market remained soft in September, with preliminary net order numbers reported by FTR Associates coming in at the lower end of expectations.

FTR reported preliminary Class 8 truck net orders at 15,205 units, down slightly from August. September orders were 35% below last September, and concluded the weakest quarter since Q3 2010.

The annualized rate for net orders placed in the third quarter is just 174,400 units, FTR reported.

“September orders were at the low end of our expectations so they were somewhat disappointing,” said Eric Starks, FTR president. “We wouldn’t have been surprised to see three to four thousand more units ordered in the month, but the reported numbers were certainly within the range we expected to see, albeit softer than we would have liked. Even with sluggish freight levels, we still expect to see a seasonal bounce in orders during Q4, but likely not at levels that many in the industry are hoping to see.”

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Durable Goods Orders Rise on Higher Transportation Orders

Durable goods orders rose in July but declined excluding transportation orders, the Commerce Department said Friday.

Overall orders for goods mean to last at least three years rose 4.2%. Excluding transportation orders, which tend to be volatile, orders slipped 0.4%.

Orders for motor vehicles and parts improved 13%, while civilian aircraft orders jumped 54%.

Bookings for non-defense capital equipment excluding aircraft fell 3.4%, Bloomberg reported. Economists’ median forecast for overall orders was a 2.5% gain, Bloomberg said.

Durable goods include large items like refrigerators and air conditioners. Trucking is a major beneficiary of durable goods manufacturing, hauling both components and finished goods.

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Class 8 orders remain weak in July; analyst blames lack of confidence

COLUMBUS, Ind. -- As expected, Class 8 net orders were weak in July with build rates exceeding the pace of incoming orders.

The most recent data published by ACT Research in its State of the Industry report, showed consistent Classes 5-7 orders but continuing weak orders for Class 8 trucks.

“Concerning the heavy-duty market, we view the unusual pairing of weak orders and low cancellations as a reflection of today’s bifurcated truck market,” said Kenny Vieth, president and senior analyst at ACT. “To that end, we believe confidence is at a key component of the order pullback across a large swath of carriers.”

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US trailer orders weak in July: ACT Research

COLUMBUS, Ind. -- Keeping in line with seasonal fluctuations, July posted weak order totals for the US trailer industry at 14,500 new orders. Orders were down 5.9% month-over-month, according to the latest figures in ACT Research’s State of the Industry: U.S. Trailers report.

“The net order picture was a bit stronger than new orders, but still down 2% month-over-month,” said Frank Maly, director of commercial vehicle transportation with ACT. “Additionally, the decline in orders outpaced the slide in production, resulting in the lowest level of backlogs since last December. July shipments were up 14.8% year over year, although they were down 12.6% from last month.”

Maly further noted that confidence and availability of funds are at the centre of the pullback by credit buyers, impacting ongoing trailer order demand.

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US used truck sales up in June, trailer orders stay soft: ACT

COLUMBUS, Ind. -- US used truck sales grew 8% in June over May, but lagged June 2011 and the first six months of 2011, while pricing appears to be slowing a little more rapidly than was previously expected, according to the latest report from ACT Research.

“While June’s sales appear positive at face value, concerns are now surfacing, especially relative to the amount of inventory on hand and the prices at which those units were acquired,” reported Steve Tam, vice-president, commercial vehicle sector, with ACT.

Concerning pricing, he added, “The slowdown is not necessarily permanent, nor irreversible, but is a reflection of current economic conditions. Flat demand for more units started the ball rolling. Higher prices have led to changes in financing, which are making transactions more expensive and preventing some potential buyers from making purchases. The solution lies in increased economic activity, which is expected, but at a measured pace.”

Meanwhile, recent softness in trailer industry orders continued in June, a further reflection of the recent soft patch in commercial vehicle demand, according to ACT officials. Despite the decline from May, order volume was up almost 4% year-over-year.

“Total production grew 3% for the month, but jumped 8% on a per-day basis, as June schedules had one less workday than May,” said Frank Maly, director, CV transportation, with ACT Research.

“Soft orders combined with increased production to shrink industry backlogs by 7% during June. The industry ended the month with backlogs of just over 104k units. The industry typically works off backlog throughout the late spring and summer months, so that decline was anticipated,” he added.

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New truck orders soft in June: ACT Research

COLUMBUS, Ind. -- Class 8 commercial vehicle preliminary net orders remained soft in June, according to reports from ACT Research. Classes 5-7 net orders also fell below trend, but the decline was expected, ACT officials said, as medium-duty activity typically tapers off during the summer months. The final numbers, which will be released mid-July, will approach 16,500 units for heavy-duty Class 8 trucks and 12,900 for medium duty Classes 5-7 vehicles. The preliminary net order numbers are typically accurate to within 5% of actual, according to ACT

“The explanation for the soft patch remains of the ‘death by a thousand cuts’ variety,” said Kenny Vieth, president and senior analyst at ACT Research. “As has been the case since late February/early March, the issue appears to boil down to credit-buying truckers’ confidence in the economy relative to the risk of taking out a sizeable loan to buy a truck. To that end, risk, economic or political, domestic or global, remains high, and memories of 2009 are still fresh.”

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Commercial trailer orders reach five-month high

COLUMBUS, Ind. -- New and net trailer orders in October rose to their highest levels since April and May at 19,408 units and 17,384 units, respectively, according to a report from ACT Research. Taking seasonality into account, October's backlog rose a modest 1.5% month-over-month, according to ACT.

"With orders and production in line, there is nothing to suggest an upwards move from current production levels, at least not until we know the outcome of peak season orders," said Frank Maly, director of CV transportation analysis and research with ACT. "Component availability appears to have reached a comfortable equilibrium with current production rates."

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Commercial vehicle net orders stronger than expected in October: ACT

COLUMBUS, Ind. -- North American Class 8 commercial vehicle preliminary net orders for October surprised on the upside, improving both month-over-month and year-over-year, according to ACT Research. The final numbers, which will be released mid-November, will approach 27,700 units for heavy-duty Class 8 trucks and 13,300 for medium Classes 5-7 vehicles. The preliminary net order numbers are typically accurate to within 5% of actual.
"At this level of order activity, there is probably some incremental fleet growth taking place," said Steve Tam, vice-president, commercial vehicle sector, ACT. "The underlying fundamentals in the heavy truck market are all healthy. Fleet equipment is old, trucker profitability is good, used truck values are strong, and financing is generally available. The strength in orders supports ACT's forecast for next year."

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Factory Orders Rise 0.3% in September

Factory orders rose 0.3% in September, the Commerce Department said Thursday.

The increase followed a revised 0.1% gain in August that was originally reported as a 0.2% drop.

The September gain topped economists’ forecasts of a 0.2% decrease, Bloomberg reported.

Capital goods orders excluding aircraft and military orders, a measure of future business investment, jumped 2.9% following a 0.9% gain the previous month.

The trucking industry relies on factory orders and shipments for much of its business.

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Commercial trailer net orders improved in September

COLUMBUS, Ind. -- After recent lackluster performance, trailer order activity posted solid improvement in September, according to ACT Research Co. Net orders were up almost 31% month-over-month and 22% year-over-year. Supported by solid production and inventory reduction, total trailer factory shipments were up nearly 65% year-over-year in September.

"Production is still outpacing new order intake, despite the improvement in orders in September," said Frank Maly, director CV transportation analysis and research with ACT. "This is reducing the backlog. However, we cannot divorce ourselves from seasonality: orders are always weak and backlogs always fall through the third quarter. On a seasonally adjusted basis, total trailer backlogs have been virtually unchanged since May."

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Class 8 truck orders defy economic doom and gloom: ACT Research

COLUMBUS, Ind. -- ACT Research has reported commercial vehicle order activity strengthened in September, during what is traditionally the weakest new order period of the year.

North American Class 8 net orders rose to 23,600 units, a gain of 55% year-over-year and 12% month-over-month, ACT reported in its latest State of the Industry report.

Classes 5-7 orders were up 8% month-over-month.

"Given the steady drumbeat of bad economic news in July and August, and the retrenchment of consumer confidence, we would have understood if commercial vehicle order activity waned through the balance of Q3, but it didn't," said Kenny Vieth, president and senior analyst at ACT. "Class 8 build so far this year stands at more than 180,000 units. Years of deferred purchases are buoying up demand."

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