Classes 5-8 Production Exceeded Build Plans Again; Retail Sales Remain Robust

ACT Research reports to positive momentum to slow in 2H’23, as the impact of prior Fed rate increases takes hold

Given the relatively weak environment for orders, combined with a fairly healthy supply chain, Class 8 backlog should be on a downward trajectory until 2024 orderboards open. April was no exception, with backlog down 15.1k units m/m to 203.1k, according to ACT Research’s latest State of the Industry: NA Classes 5-8 report.

According to Eric Crawford, ACT Research’s Vice President, Senior Analyst, “As supply conditions have improved, so has output. Evidencing this trend, heavy-duty and medium-duty production each exceeded build plans (again) in April. The Class 8 build rate in April was 1,384 upd, 6% above industry build plan. The industry produced 26,302 Class 8 units across April’s 19 production days. Classes 5-7 build averaged 1,192 upd, 13% above build plan. April’s build rate was the highest in nearly four years (since August 2019). The industry produced 22,650 units across April’s 19 build days.”

Regarding sales, he noted, “Heavy-duty and medium-duty retail sales remain robust, and each rose double digits y/y in April. The heavy-duty unit per day rate, 1,431 seasonally adjusted, was its highest in nearly four years, and the medium-duty rate, 1,009 seasonally adjusted, was its highest in 18 months.”

Crawford concluded, “We expect positive momentum to slow in 2H’23, as the impact of prior Fed rate increases takes hold (and additional rate increases may still be yet to come), and the cumulative impact of depressed freight rates over an extended period weighs on pent-up demand.”

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