N.A. Commercial Vehicle OUTLOOK

1. Economy - In Q3, the US economy grew at a 2.8% q/q annualized rate, just under the 2.9% consensus forecast and the 3.0% pace posted in Q2. Q3 marked the second consecutive quarter in which the economy expanded above the 2.0% potential growth rate.

2. Medium Duty - Medium duty orders and cancellations showed signs of near-term improvement in September, but it may be a case of too little, too late.

3. Heavy Duty - Class 8 orders moderated in October. During the month, NA Class 8 net orders were 30,600 units, down 5.2% from last October. On a SA basis, Class 8 orders fell 30% from September to 24,500 units, and a 294k SAAR.

4. Trailer - The build rate, at 835 units per day (upd), was lower than August’s 850 upd rate, but with two fewer production days.

5. Used Truck - Same Dealer used Class 8 retail sales floated lower in September, perpetuating a familiar pattern of slowing. The 2.3% decrease was nearly identical to the 2.7% seasonal slowing indicated by history.

Freight Forecast: U.S. Rate & Volume OUTLOOK

1. The shipments component of the Cass Freight Index® fell 1.9% m/m in October, after a 1.7% decline in September.

2. US dry van TL spot rates, net fuel, rose 4₵ m/m to $1.62 per mile in October, up 5.8% y/y.

3. The Driver Availability Index remains stubbornly loose. Industry checks since last month suggest maybe 5,000 drivers could be swept out by 11/18 Clearinghouse-II rules, fewer than estimated.

4. The trajectory is quite different than the past two cycles, but after three years in loose territory, the truckload supply-demand balance is set to turn tighter in the coming months.

5. The Supply-Demand Balance fell in September to 48.8 (SA), from 56.9 in August.

State of the Industry: N.A. Classes 5-8 Vehicles

Final North American Class 8 net orders totaled 30.6k units in October, with ongoing strength in the vocational market.

“Vocational truck orders totaled 9.5k units and, after last month’s surge, suggest the potential for vocational market queueing ahead of EPA’27 and GHG-3,” according to 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 were down 7.3% y/y at 21.1k units, as a weak for-hire market continues to suppress tractor demand.”