Class 8 orders dropped 39% in April on a year-over-year basis and declined 16% sequentially, according to preliminary data tracked by ACT Research Co.
By contrast, medium-duty truck orders remained relatively “healthy,” noted Kenny Vieth, ACT’s president and senior analyst; down 10% sequentially but up 12% year-over-year.
In raw numbers, ACT said Class 8 orders reached 13,700 units in April, while orders for Class 5-7 trucks topped 20,100 units.
“Despite increasingly easy year-over-year comparisons, demand for Class 8 vehicles continued to lose traction in April,” Vieth said in a statement.
He added that the “drivers of soft Class 8 demand” remain intact from previous months: overcapacity resulting weak freight rate environment; softness in late-model used truck values; and excessive new vehicle inventory.
John Larkin, managing director and head of transportation capital markets research at Stifel Financial Corp., noted in a recent market update that motor carriers have, for the most part, backed off on capacity additions.
“With a few exceptions, carriers have canceled orders for incremental tractors and trailers,” he said. “Instead, carriers are intensely focused on improving equipment utilization and revenue yield, even though rate increases will be hard to come by.”