Truck orders drop in February
March 23, 2012
February net orders for U.S. and Canadian class 8 trucks fell below 20,000 units for only the second time since last September. Orders fell 10.8% from January to February. At 17,882 units orders were at their lowest level since August 2011. Year-over-year growth has remained nearly flat for the last 4 months, down 7.1% in February. The year-over-year comparisons will be very difficult for the next 2 months as we overlap the strong surge of order activity in early 2011.
Weaker, but solid
When looking at the six month average, order activity has remained in a fairly narrow range for the last year, staying between 18,000 and 23,000 units per month. Since October 2010, with the exception of April 2011, orders have remained between 15,000 and 25,000 units per month. Orders have shown a monthly drop in 3 of the last 4 months, but are only just below the six month average of ~20,000.
Q1 production slots are now filled and Q2 is down to just 20,000 open slots. After seeing several months of erratic order activity, February was more normalized with respect to when orders were scheduled for. Truckers are still able to get a new truck relatively easy (dependent, of course, on model and manufacturer) and will not have to wait very long for delivery after the order is placed.
Order activity in early 2011 was healthy as orders averaged over 22,000 units for the first six months of the year (mostly driven by the April surge). The industry then had a slight hiccup going into the third quarter (which is relatively normal as truckers are more focused on moving freight than placing orders for trucks). Since October, orders have averaged ~21,000 units. This is a solid, but not robust, level of activity.
We expect orders to stay relatively healthy in 2012. The fleet is still old and carriers will continue to replace aging equipment. We have no expectation for a similar order surge like we saw in April 2011. As such, we are likely to see the year-over-year comparisons be quite difficult until we get into May. Order activity is likely to slow as we get into Q2 as fleets focus once more on the freight season. Orders always show a high level of month-over-month volatility but we expect volumes to trend lower as we get into the summer.
- Source: FTR Associates’ OEM Market Indicator Database
- The graphed data is for U.S. and Canadian truck orders only
- The market indicator data includes all major North American truck builders.
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