Class 8 truck orders beat expectations in May, according to preliminary estimates from ACT Research and FTR Transportation Intelligence.
ACT reported fleets logged orders for 23,000 units, which is up 46% month-over-month and 49% year-over-year, and FTR recorded orders for 18,900 units, a 25% month-over-month and 37% year-over-year increase.
“Market observers may recall that demand typically slows in Q2. However, surprises are always lurking,” Steve Tam, ACT vice president and analyst, said in a news release. “Class 8 preliminary order intake provided May’s drama, effectively zigging when they were expected to zag. Ample open build slots in Q3 and Q4, combined with the OEMs’ desire to achieve some semblance of balance with respect to the impending pre-buy likely impacted May’s order activity.
“While we do not have complete visibility at this point, the strength is presumably driven by private and vocational fleets, supplemented by an ongoing healthy appetite for equipment in Mexico.”
Class 8 orders for the past 12 months now total 273,900 units, according to FTR’s estimate.
May activity is above recent demand trends and 2% above the average for the month over the past decade, helping abate worries of a demand decline, and the market is performing “moderately above” replacement level for orders, FTR added. After maintaining an average level of around 20,700 units over the previous three months, orders have continued to slow at a seasonally typical rate, averaging 17,900 units in the last three months.
“OEMs are actively filling build slots at a steady pace,” said Dan Moyer, FTR senior analyst for commercial vehicles. “Along with the month-over-month increase, the fact that orders were up significantly from the May 2023 level indicates that the market remains on a solid footing despite near-term challenges. While all OEMs experienced order growth, vocational markets stood out as particularly strong compared to on-highway. Despite the trend of stagnant freight markets, fleets remain willing to invest in new equipment.
“Order levels slightly exceeded historical averages and seasonal expectations, and we still anticipate a replacement level of output by the end of 2024.”