Some of the recent Class 8 order strength is likely due to a small amount of prebuying, but overall, May’s orders are likely anomalous, as the industry is in the weakest period of the year for orders, and carrier profitability remains at multicycle lows, as published in ACT Research’s latest State of the Industry: NA Classes 5-8 report.

Final North American Class 8 net orders totaled an unseasonally high 23,560 units in May (29.2k seasonally adjusted), up 51 percent y/y. Total Classes 5-7 orders fell 4.9 percent y/y to 19,306 units (20.9k seasonally adjusted).

“US Class 8 tractor orders rose 51 percent y/y in May, and vocational truck orders increased 48 percent y/y,” according to Kenny Vieth, ACT’s President and Senior Analyst. "Again, these increases are largely untethered from current market conditions, and we expect next month’s orders to be more representative of the current market.”

Regarding inventories, Vieth added, “Between strong production and softening US tractor sales over the past eight months, Class 8 inventories have risen quickly. The reported inventory decrease from March to May is attributed to a fire that broke out at a supplier plant, requiring OEMs to red tag units. Given build was 6,900 units above retail sales in April and May, inventories should have risen, rather than fallen the past two months. On that adjusted basis, Class 8 inventories have risen over 22,000 units the past nine months, reaching levels not seen since August 2019.”

Vieth concluded, “Class 8 cancellations increased in May to 2,623 units and 1.8 percent of the backlog on a nominal basis. Seasonally adjusted, cancellations were 3,394 units and 2.3 percent of the backlog, above the long-term average of 2 percent for the first time in two years.”