New trailer orders in August were down 72% from a year ago, ACT says
Fleets unwilling to invest, amidst economic uncertainty and low freight demand, analyst says.
Orders of new trailers by U.S. companies rose slightly in August, but they remain barely one-quarter of their volume for the same month in 2018, as the market continues to suffer from economic uncertainty and low freight demand, according to ACT Research Co.
New U.S. trailer orders of 14,800 in August were up 7% month-over-month, and after accounting for cancellations, net orders of 10,600 hit their second sequential increase in nine months, rising 2% from July, the Columbus, Ind.-based analyst and forecasting firm said today.
However, those modest increases did almost nothing to counteract the greater trend, which showed that August orders were down 72% compared to August of 2018, and year-to-date net trailer orders are 51% below last year, according to this month's issue of ACT Research's "State of the Industry: U.S. Trailer Report."
The numbers align with ACT's previous warnings that the slumping heavy truck and trailer markets are heading for steep drops in 2020 under pressure from trade and tariff concerns, even as U.S. consumers continue to generate strong retail demand.
"With 2020 orderboards fully open, the dramatic lack of fleet interest continues to astound," Frank Maly, Director-CV Transportation Analysis and Research at ACT Research, said in a release. "Uncertainty breeds inaction, and many factors are pushing fleets to observe the market from the sidelines. Poor financials, the result of lower freight demand and weak rates, portend a challenging financial road ahead, while more general economic uncertainties generate additional headwinds."
New orders are being placed at half the pace of January, while cancellations are nearly double the unit volume, Maly said. The reason is that fleets are unwilling to commit investment for next year, while still adjusting this year's spending, he said.
ACT Research: U.S. Trailer Net Orders Up 2% M/M, but Down 72% Y/Y and 51% YTDhttps://t.co/YXV7ZhdIjj— ACT Research (@actresearch) September 26, 2019
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