Classes 5-8 Production Relative to Build Plan Fell Short in February

ACT Research said “Encouragingly, Class 8 retail sales remain robust, and February HD orders rebounded off a particularly weak January”

According to ACT Research’s latest State of the Industry: NA Classes 5-8 report, February heavy-duty and medium-duty production relative to build plan each fell short. The Class 8 build rate in February was 1,277 units per day (upd), up 13.9% y/y, but down 7.6% m/m, and 7.4% below industry build plan. Classes 5-7 build averaged 872 upd in February, -5.8% y/y, but +5.5% m/m.

According to Eric Crawford, ACT Research’s Vice President, Senior Analyst, “Trucking industry demand rolls on seemingly unabated, with retail sales unphased by higher interest rates, as pent-up demand remains for now. Encouragingly, Class 8 retail sales remain robust, and February HD orders rebounded off a particularly weak January. That said, we expect momentum to shift in second half of ‘23, as the Fed continues its aggressive push to subdue inflation.”

Regarding backlog, he noted, “The backlog of unbuilt medium-duty and heavy-duty Classes 5-8 orders declined 4,300 units to 368,800 units (371k seasonally adjusted), representing a second consecutive month of decline. Class 8 backlogs declined 1.2% to 230,800 units, while Classes 5-7 backlogs declined 1.0% to 138,000 units.”

Crawford concluded, “On a seasonally adjusted basis, and at February’s build rate, the heavy-duty BL/BU ratio remained flat at 7.8 months (8.6 months nominal), and Classes 5-7 BL/BU ratio declined to 7.2 months (7.5 months nominal), from 7.5 months in January. Of note, 93.5k units in backlog are scheduled for the second half of 2023, considerably below the 133k units scheduled for 2022’s second half this time last year.”

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