Class 8 Orders Cleared 20,000 in December

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Transport Topics  /  January 5, 2017

Class 8 orders cleared 21,000 in December, ending the year on a solid but lukewarm note.

Orders reached 21,400 units, down 24% year-over-year.

In the 2015 period, orders were 28,150.

December was the only month in 2016 in which orders rose above 20,000 units.

In 10 months of 2015, orders climbed above 20,000, with two months clearing 30,000.

Research company FTR pegged preliminary net orders at 21,200, calling the volume very consistent with the order demand of the past two months.

Class 8 backlogs should rise significantly in results for December 2016, FTR said.

Don Ake, FTR’s vice president of commercial vehicles, called the volume “decent” and said the demand “met expectations.”

“Production was weak in December," Ake added, "but based on the Q4 orders, it should begin a modest recovery in February.”
 

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Truck orders stable as 2016 ends

Fleet Owner  /  January 5, 2017

December Class 8 orders were above projections, say analysts, though overall medium-duty demand remained on a downward trend.

Class 8 and medium-duty orders made strong showings in December, according to preliminary data analysis, though medium-duty demand overall is declining, noted Michael Baudendistel, vice president with the Stifel Transportation & Logistics Research Group.

Yet Baudendistel stressed that, for now at least, Stifel is maintaining its 2017 projections for 230,000 Class 8 and 230,000 Class 5-7 medium-duty units.

“Fall order season closed out with December orders which were slightly above expectations, though still supportive of current 2017 production outlooks and not likely to lead to any significant change in estimates, in our view,” he explained in a research note this week.

“Overall, we believe total orders for the month [of December] should be viewed as in line with relatively low expectations, with Class 8 slightly outperforming and Class 5-7 slightly underperforming expectations,” Baudendistel pointed out. “[It’s] perhaps encouraging that demand has not deteriorated any further.”

Another analysts noted that demand for Class 8 units ended 2016 “on a positive note” with 21,400 units booked in December; the only month in 2016 in which orders rose above 20,000 units.
However, year-over-year comparisons were negative, as Class 8 orders are down 24% in December 2016 compared to the same month in 2015.

By contrast, medium duty Class 5-7 orders climbed to an eight-month high of 20,600 units back in December, though for all of 2016, medium-duty orders of 228,500 units were “a virtual carbon-copy” of 2015’s net order intake, giving up 1.1% compared to 2015.

Stifel’s Baudendistel, though, noted that medium duty orders “have now declined for five consecutive months” and that following weak orders in November last (down 9% compared to November 2015), his firm reduced its 2017 medium-duty production estimate to 230,000 units from 235,000 units.

“We are maintaining that forecast for now, though we believe persistent weakness in orders indicates there remains pressure to the downside on our recently-lowered forecast,” he added.

That being said, Don Ake, vice president of commercial vehicles at research firm FTR, believes that Class 8 orders in particular “have been following stable, traditional, patterns for six months now,” and based on fourth quarter 2016 order volumes “should begin a modest recovery in February.”

He added that the most recent economic news has been positive, so freight demand should keep truck orders propped up for a few more months.

“[Though] 2017 still looks to be a tough year, backlogs are [now] growing and that means the worst should be behind us for now,” Ake said.

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Class 8 Truck Orders to See Expected Increase

Heavy Duty Trucking  /  January 5, 2017

Class 8 truck net orders are projected to realize a significant increase in December, according to industry analysts.

FTR had forecasted an increase in the last month of 2016 and based on early numbers, December will see a 10% gain over November. The solid order activity is in line with demand from the last two months, showing an upward trend in the Class 8 market.

Month-to-month orders in the fourth quarter were very stable when discounting the higher cancellations in October, according to FTR. Class 8 backlogs are expected to increase significantly in the month as well, which will give the market momentum heading into 2017.

“Another decent month that met expectations. Orders have been following stable, traditional, patterns for six months now, which is great news after the large drop-off in 2016,” said Don Ake, FTR vice president of commercial vehicles. “Production was weak in December, but based on the Q4 orders, it should begin a modest recovery in February.”

Despite gains, order activity was still 24% below December, according to ACT Research. Net orders were at around 164,000 units for the year, but production was aided by a large backlog at the beginning of 2016.

“The most recent economic news has been positive, so freight demand should keep orders propped up for a few more months,” said Ake.  “2017 still looks to be a tough year, but now backlogs are growing and that means the worst should be behind us for now.”

Medium-duty Class 5-7 orders hit an eight-month high in December, according to preliminary numbers from another analyst, who is projecting 20,600 units for the month. Combining medium- and heavy-duty orders for the year, he expects the full year tally to reach 415,600 units.

“As December is historically the second-strongest order month of the year, seasonal adjustment reduces the month’s orders to 19,000 units,” he said. “For all of 2016, medium-duty orders of 228,500 units were a virtual carbon-copy of 2015’s net order intake, giving up 1.1% compared to 2015.”