Winter Park, Florida 04/05/2016 - Orders for tractor-trailer Class 8 trucks in the US continued to fall April, dropping 16 percent from March and 39 percent year-on-year, according to ACT Research.
There were 33,800 new Classes 5-8 vehicle orders booked in April, ACT Research said, but only 13,700 of those were Class 8. This marked the worst April since 2009 for Class 8s.
ACT attributed the weak orders to "an ongoing overcapacity narrative, a resulting weak freight rate environment, softness in late-model used truck values, and excessive new vehicle stocks".
Falling commodity prices and lacklustre manufacturing data have depressed freight demand and rates, which has forced hauliers to review their future fleet needs, one US-based extruder suggested.
"This is something that people need to keep an eye - it's bad news on two fronts. From a larger macro perspective, [this indicates that] people are downgrading their freight expectations for the rest of the year. That's not a good signal for the manufacturing sector," the extruder said.
Earlier this week, the Institute for Supply Management (ISM) reported that its US manufacturing index fell to 50.8 percent in April from 51.8 percent in the prior month. Meanwhile, Markit Economics' final PMI came in at 50.8, which was the lowest reading since 2009.
"The April PMI data suggests there's no end in sight to the current downturn in manufacturing activity. The survey indicates that factory output is dropping at an annualized rate of approximately three percent, and factory headcounts are being culled at a rate of around 10,000 per month," Chris Williamson, Markit chief economist, said.
"Destocking is also very much in evidence as companies often reported weaker-than-expected demand and exports are slumping at the fastest rate for one-and-a-half years," Williamson added.
The deterioration of the Class 8 truck market also directly affects aluminium demand.
"There's a lot of extrusions that go into heavy duty trucks and trailers," the extruder source said. "A total collapse of that sector could take a couple percentage points off the annual growth rate for the industry as a whole."
(Editing by Mark Shaw)