US Tractor Index Falls Into Negative Territory

According to ACT Research, signs continue to mount that the freight cycle is getting long in the tooth.

“ACT’s US Tractor Dashboard, an aggregation of 15 metrics designed to predict the direction of Class 8 net orders, went from neutral to negative in October, with the reading falling month-over-month from a neutral +1 reading to a negative -5 reading in October,” said Kenny Vieth, ACT’s President and Senior Analyst. He elaborated, “Negative readings are correlated with orders falling below replacement levels. While a sharp drop in orders is perhaps a moot point with a 300k-plus Class 8 backlog, it nevertheless shows that the conditions that were propelling tractor demand through the middle of 2018 are starting to fade.”

Regarding ACT’s medium duty forecasts, Vieth said, “Preliminary November pulled back on cue, though not quite as much as expected. Steady demand, combined with moderate growth in build and sales kept forecasts unchanged during the month. Better-than-expected orders, averaging nearly 25,000 units per month for the past year, continue to exert moderate upward pressure on medium duty forecasts.”

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