Class 8 backlog-to-build ratio lowest since 2020

Total Class 8: N.A. Backlog & BL/BU Ratio. (Graph: ACT Research)

In August, the backlog for Class 8 vehicles fell by 11,000 units to 152,600 units total, which brought the nominal backlog-to-build ratio to 5.3 months, the lowest mark for the figure since fall 2020.

According to ACT Research’s latest State of the Industry: NA Classes 5-8 report, the pent-up demand represented by the backlog is likely to fade for the rest of 2023 while vocational truck demand should remain strong.

“The Class 8 backlog is likely to turn higher in the near term as 2024 order season begins,” said Kenny Vieth, ACT president and senior analyst. “August is one of the weakest months of the year for Class 8 orders, as out-year orderboards are not typically fully open. While the tractor market appears under pressure heading into 2024 amid weak freight and falling carrier profits, vocational truck demand remains strong.

Vieth said that net orders rose in August by 3900 units month over month to 19,500 units, and vocational trucks accounted for 42% of orders in August, well above the historical average of 29%.

Classes 5-7 saw their backlog fall by 3100 units to 113,900 units in August for a backlog-to-build ratio that rose to 5.3 months from 4.7 months in July.

“Even with an outperforming economy providing demand-side relief, freight markets continue to bounce along the cycle bottom, with for-hire demand muted as private fleets add capacity and insource freight,” Vieth said. “Pent-up equipment demand, especially for tractors, is likely to fade into year end, but build plans aren’t yet showing the effects of sharp declines in freight rates and carrier profits.”