North American Class 8 net orders dipped in May to 13,300 units, according to preliminary data released by FTR, the lowest total since November 2021. May order activity was down 13% month-over-month and down 43% year-over-year.
Class 8 orders have totaled 270,000 units over the last 12 months, and OEMs are running out of build slots for 2022 and are still constrained by the supply chain snarls – especially semiconductors – and cannot increase build rates.
"The supply chain was making slight improvements in the last few months, but some of that progress stalled due to disruptions in China and Russia," said Don Ake, FTR vice president of commercial vehicles. "The OEMs are not confident they can increase production in the second half of the year; therefore, they are not able to take more orders."
Truck orders are entering a seasonally weak time of year as OEMs typically have yet to open build schedules for next year, but May’s sequential decline in Class 8 orders from April actually reflects some mild improvement on a seasonally adjusted basis, according to ACT Research Vice President and Senior Analyst Eric Crawford,
"So despite broader macro uncertainty about Russia/Ukraine, interest rates and potential recession," he said, "the prevailing theme in trucks is largely unchanged: long backlogs and supply-chain constrained production continue to keep new orders trending within a narrow range.”
With Class 8 backlogs stretching through 2022 and still no clear visibility on the easing of the all-things shortage, Crawford said May’s net orders reflect a mild upside surprise, "albeit one still in line with the ongoing conservative approach by OEMs looking to limit the risk of overbooking and under-building that plagued the industry in 2021," he said.
Ake equated the current order trend for new trucks to ticket sales for a popular concert.
