ACT Research: US Trailer Industry Increases Build Rate in February with Some Chatter of Softening Demand
Reflecting a higher build rate, the backlog-to-build ratio contracted to 8.5 months in February, after closing January at 9.9 months. For context, the average since Q3’21 has been in the 8-month neighborhood, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailers report.
“With most categories showing higher build in February, backlogs slid slightly, down 0.5% sequentially (but +23% y/y). The dry van backlog was 0.4% lower m/m, with reefers down 0.6%, and flats nearly 4% lower compared to January,” said Jennifer McNealy, Director–CV Market Research & Publications at ACT Research.
“Despite OEMs expanding availability, 2023 is not yet fully open, partially because manufacturers are facing volatile commodity costs, long lead times for some input components, and improving but still challenging labor considerations, but also because OEMs are reluctant to overpromise and underdeliver on both price and timing.”
She added, “Demand overall remains robust, but some OEMs shared this month that conversations of softening are happening. That said, the same manufacturers indicated the talk has not yet turned into slowing orders or cancellations.”
McNealy concluded, “Other OEMs told us they are seeing a few actual cancellations, but the cancel data is primarily a reflection of spec changes and plant rewrites. Some smaller fleets and owner operators have cancelled orders, but large fleets remain eager to fill the void. OEM conversations also continue to suggest supply-chain constraints are likely to remain a limiting factor to production in 2023, with manufacturers mentioning a renewed fluctuation in materials costs, particularly steel, and continuing long lead times of some components.”
ACT Research’s State of the Industry: U.S. Trailers report provides a monthly review of the current US trailer market statistics, as well as trailer OEM build plans and market indicators divided by all major trailer types, including backlogs, build, inventory, new orders, cancellations, net orders, and factory shipments. It is accompanied by a database that gives historical information from 1996 to the present, as well as a ready-to-use graph packet, to allow organizations in the trailer production supply chain, and those following the investment value of trailers, trailer OEMs, and suppliers to better understand the market.
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis, and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.