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Mack: Humming economy drives rising truck orders

March 23, 2018
The U.S. economy continues to display “good momentum” in 2018, putting “significant upward pressure” on Class 8 orders, according to Mack Trucks.

LOUISVILLE, KY. The U.S. economy continues to display “good momentum” in 2018, putting “significant upward pressure” on Class 8 orders, explained Jonathan Randall, senior vice president of sales and marketing for Mack Trucks, during a press conference here at the Mid America Trucking Show.

“Things continue to hum [and] everything is working in the economy,” he said, adding that strong freight volumes, tight capacity, and rising freight rates have combined to generate a surge in Class 8 orders. Though Randall said Mack expects Class 8 production to total 280,000 units this year, he stressed that number may go higher as orders increase from the long-haul sector and from fleets.

“January and February were two of the biggest Class 8 order intake months ever,” Randall said. “There has been an influx of 70-in. sleeper orders and daycab orders are now surpassing straight truck orders. It’s not just a replacement cycle [for older trucks]; we’re seeing growth [of fleets] as well.”

He also noted that in 2017, the over-the-road sector comprised 41% of Class 8 sales, but over the last five month rolling average, that’s increased to 48%.

Randall said Mack’s new highway tractor, the Anthem, is benefiting from that demand. Since it went into production in February, the OEM has built 500 Anthem models which are now either on dealer lots or in fleets.

But the company’s vocational products are seeing strong demand as well due to increased construction market activity. Randall explained that construction spending reached a record high of $1.25 trillion in 2017, which represents year-over-year growth of 2.6%, and contractors added 210,000 jobs in 2017, a 25% increase over 2016.

Although construction truck sales will continue to grow in 2018, Randal said the concern is how the demand for labor in both the construction and trucking sectors could lead to a shortage of workers. “The question is, ‘who is going to drive all of the trucks we are selling?’” he said.

To meet the rising demand for trucks, Randall said Mack added 400 workers in January and is planning to increase its build capacity by 40% year-over-year. He added that while recently imposed steel and aluminum tariffs will “certainly have a negative impact on cost,” so far, all of Mack’s component suppliers are helping the OEM meet demand for new trucks. “There are challenges in our supply chain but nothing limiting us so far,” he said.