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New truck orders remain below replacement levels, used inventories climbing

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Class 8 orders for August came in at 15,400 units, according to preliminary data released by FTR. August's total was up 16% from July but down 26% year-over-year when orders began to spike and continued through Thanksgiving. 

Kenny Vieth, ACT Research President and Senior Analyst noted that as represented by seasonal factors, the industry remains at that time of the year when expectations for order activity are low, as most of the current year’s orders have been booked and out-year build plans are only starting to open,.

“For Class 8, August is the last month of weak order season, the four-month period that begins in May. Adding to downward pressure, the 2023 build plan has been essentially filled since the end of Q1," he said. 

The August level of order activity continues to be below replacement levels, and total Class 8 orders for the previous 12 months have equaled 294,000 units.  

 "As build slots start to open for 2024 production, fleets are starting to place orders on the books. However, much of the ordering for 2024 has yet to be seen and typically will not show up until September or October," said FTR Chairman Eric Starks. "Despite rising order activity, the year-over-year comparisons will look horrible through November due to record order activity in the second half of 2022." 

The actual unit order levels will be more significant in the near term than the year-over-year change in analyzing the strength of the market, Starks said. Even though order activity is still below replacement demand, a key takeaway from the August data is that fleets are not shying away from ordering new equipment, "which is a good sign for the second half of the year," Starks said.

Rises in used truck and trailer inventories – a trend that expected to continue – has pushed pricing down.