Page 27 - Newcom

Equipment
Class 8 orders slide as OEMs’ 2019 order boards fill up
Class 8 orders fell sharply in Novem- ber, to 27,500 units, marking the end of five consecutive months exceed- ing 40,000 units, according to pre- liminary data from FTR.
November marked the lowest total this year, and the weakest month since September 2017. But FTR says the drop was expected, as OEMs have nearly filled their order boards for 2019. Class 8 orders for the last 12 months have totaled 499,000 units, FTR reports.
“It was expected that orders would fall fairly soon, as the avail- able 2019 slots filled up. A couple of the OEMs that had some open capacity actually had solid order numbers, while the rest appear to be nearly sold out for next year,” said Don Ake, FTR’s vice-president of commercial vehicles. “This drop in orders was reasonable consider- ing the huge volumes of the last five months, although 27,500 is not that bad of a number. The freight funda- mentals remain strong and we still expect the equipment markets to have a great year in 2019.”
Ake said cancellations could rise, due to long backlogs, not because of market weakness.
“With OEMs filling up the last available build slots, it is possi- ble that orders may drop below 20,000 in December,” he said. In addition, trailer backlogs are now stretched out to the second quarter of 2019, according to ACT Research. This on the heels of the strongest third quarter for orders in history.
ACT Research noted the strong order boards combined and trailer production rates will challenge industry component and material suppliers in the coming months.
“Strong freight demand and tight capacity have combined to sup- port both contract and spot rates. Extremely positive fleet financial performance is the result, provid- ing both the need and ability to continue strong levels of equip- ment investment,” said Frank Maly, director, commercial vehi- cle transportation analysis and research at ACT Research. “Solid orders are not just a short-term phenomenon, as five of the top 10 order volume months in industry history have occurred in the last four quarters.” TN
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