After Tough 2016, Heavy-Duty Truck Orders Rise in January

February 03, 2017 by Jerry Hirsch, @Jerryhirsch

After a dismal 2016, the heavy-duty truck business looks to be picking up.

Analysis of January sales by two different trucking industry research firms found that orders last month were unexpectedly strong.

North American Orders for trucks in the heaviest Class 8 segment reached 21,600 vehicles, a 20 percent increase compared with the same month a year earlier, FTR Transportation Intelligence said Friday.

The firm said the level of orders demonstrated a consistent trend and showed that the market righted itself at the end of last year.

The pace of big trucks orders over the past three months represent an annual equivalent of 248,000 units. Class 8 truck sales in the U.S. and Canada fell to 216,000 last year after reaching 278,000 in the prior year.

“It is unusual for January orders to be higher than any of the preceding [fourth quarter] months,” said Don Ake, vice president of commercial vehicles at FTR. “This indicates fleets are more confident in market conditions than they were four months ago.”

Truck makers, which laid off thousands of workers in the U.S. last year as they cut production to match the sagging demand, will now “begin to fill in their production schedules,” Ake said.

February builds also look to be much stronger than in previous months, he said.

Manufacturers also are expressing optimism that the market is turning up.

“The tone of conversations [among dealers] are generally positive,” Robert Christensen, president and chief financial officer of Paccar, which owns the Kenworth and Peterbilt brands, said during a conference call with investors earlier this week. “I just came back from the North American truck show in New Orleans and dealers are looking optimistically toward the year. It should be a very good year for the truck industry again in 2017.”

The truck maker believes its production pace will increase as the year progresses.

Trucking companies started to see improvement in freight demand and rates in December.

Swift Transportation’s rate per loaded mile, “while still negative on a year-over-year basis was the best we have seen from the market all year. It actually turned positive in December for the first time this year,” Richard Stocking, the carrier’s chief executive said in a conference call with investors last week.

“Optimism around the near- to medium-term outlook for freight markets and the broader economy seems to have caused orders to pick up, albeit from a low level,” said Michael Baudendistel, an analyst at Stifel Financial Corp.

ACT Research found the overall truck market improving last month.  It reported Friday that preliminary order data for trucks in Classes 5 through 8 indicate industry business climbed to a thirteen-month high of 45,300 vehicles. That represents a 27 percent improvement compared with January 2016.

North American orders for Class 8 trucks hit a fourteen-month high of 22,200 vehicles last month, up 23 percent compared with the same month a year earlier and beating and expectations, ACT said.

Preliminary North American orders for trucks in Classes 5 through 7 hit an eleven-month high of 23,000 vehicles in January, a 32 percent increase compared with the same period a year earlier.

“This is the time of year when big fleets are in the market scheduling replacement orders for the coming year,” said Kenny Vieth, ACT’s president and senior analyst.

He said January marked only the second year-over-year improvement in truck orders in the last 23 months.


2 Responses

  1. Patrick Couch

    Interesting. Ward’s has an article out today that appears to be saying January was a dismal month for MD and HD, with Class 8 being particularly hard hit. Any idea what the difference is between the two data sources? Deliveries vs orders maybe?

    • Jerry Hirsch
      Jerry Hirsch

      Ward’s generally tracks registration data. These research firms track orders. My guess is that they are not always in sync since one is a lagging indicator of purchases and the other is a leading indicator measuring purchase intent.


Leave a Comment

Your email address will not be published.


Subscribe to our mailing lists

Choose one or more topics: