ACT Research: Vocational truck production surge to continue

Vocational truck buyers appear to be looking to get a head start on refreshing their fleets, according to the latest release of ACT Research’s North American Commercial Vehicle OUTLOOK. This was proven out by recent strength in both September and October North American Class 8 net orders. October’s final numbers totaled 30,600 units per ACT’s State of the Industry: NA Classes 5-8 report.

“Vocational truck orders totaled 9,500 units and, after last month’s surge, suggest the potential for vocational market queueing ahead of EPA’27 and GHG-3,” stated Kenny Vieth, ACT’s president and senior analyst. “With well-supported end markets and technology-forcing regulations on the horizon, vocational truck buyers not only have a willingness to get a head start on refreshing their fleet but a clear ability as the ~$2 trillion in stimulus (CHIPS, IRA, IIJA) continues to be deployed.”

Tractor orders, on the other hand, fell 7.3% y/y in October to 21,100 units. Vieth attributed this to a weak for-hire market.

“We have discussed ad nauseum this year the bifurcated Class 8 market. On the flip side, U.S. and Canadian tractor markets remain awash in capacity due to ongoing tractor retail sales strength in 2024 holding freight rates to only incremental gains cycle-to-date,” he elaborated. “After a 10-quarter elevator ride down, carrier profitability rebounded modestly in Q3, as the economy continued to generate good freight volumes and capacity continued to slowly exit the market.”

Although he expects tractor sales to slow in early 2025, Vieth believes “one of the missing pieces of the recovery-to-date – capacity rationalization – will finally fall into place.”

“Even as we more fully recognize the depth of the macro-economic support lifting heavy vocational equipment demand, the tractor market remains under pressure,” Vieth concluded.