Medium and Heavy Duty Markets Expecting Tougher Conditions in 2020

Declines are ahead in 2020, as sales and build will follow trends in net orders and backlog volumes lower in their respective markets

According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, the prosperity of the year we are leaving will transition to tougher medium and heavy-duty market conditions in 2020.

 “After peak build and sales in 2019, significant declines are ahead in 2020, as sales and build will follow trends in net orders and backlog volumes lower in their respective markets,” said Kenny Vieth, ACT Research’s President and Senior Analyst. He explained, “Recent articles point to a growing belief that a recession is likely to be averted in 2020, so the economic ‘days’ are likely to become brighter as we move through 2020. Unfortunately for the industry, the expected rebound will not come soon enough, or be robust enough, to take a sharp equipment downturn off the table.”

Speaking about the Class 8 market, Vieth said, “After October’s modest order strength, November data quelled thoughts of a better-than-expected order season, with November’s booking down about 4,400 units from the previous month.”

Regarding the medium duty markets, he commented, “Weakness has spread in medium duty demand. The drivers of lower build rates are weak orders, falling backlogs, and elevated inventories. That weakness in turn is driven by the above-trend buying of the past 18 months, leading to slowing demand for trucks and RVs.”

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