Trailers, Class 8 Sales Slide Again In February, But Analysts Still Bullish On Outlook
Little Rock, Arkansas – Trailer orders slid for the third straight month in February according to recently released data from ACT Research and FTR Intelligence.
ACT’s preliminary estimate for February 2019 net trailer orders is 23,800 units, while FTR reports preliminary trailer orders for February at 24,000 units. February net orders slid 9% from January volume and were 20% below the same month last year.
Frank Maly, ACT’s Director of CV Transportation Analysis and Research explained why this was expected. “With the majority of this year’s build slots already committed, and many OEMs unwilling to open next year’s orderboard this early, the potential for higher gross orders is somewhat limited at this point,” he said.
“Additionally, cancellations were roughly 1% of industry backlog last month. While not excessive, that generates some headwinds for net order volumes as well,” Maly commented.
Maly also noted that backlogs only fell by 1% at month-end after reaching an all-time high in December of 2018. “At current production rates, the orderboard commits the industry into November on average, although dry vans backlogs stretch into mid-December, while reefer commitments actually edge into next year,” Maly added.
Don Ake, FTR vice president of commercial vehicles doesn’t expect backlogs to decline much in the short-term. He commented, “The decent February order volumes mean that backlogs should only decline modestly during March.”
After assessing recent trailer order history, Ake is bullish on the U.S. economy. “The current strength of the trailer market is good news for the general economy,” he explained. “It indicates fleets expect sturdy freight demand to continue throughout 2019.”
According to ACT Research’s recently released Transportation Digest, conditions in the Class 8 market also indicate a continuing strong economic outlook.
“With two months of Class 8 data for 2019, visibility on the current year is improving and current conditions are solid,” said Kenny Vieth, ACT’s President and Senior Analyst.
However, Vieth cautioned, “Volatile financial markets, weak overseas economies, higher financing rates from past Federal Reserve interest rate hikes, and the impact of erratic government policy on business confidence risk slowing things as the year progresses.”