DETROIT (Reuters) - Orders of the heavy-duty trucks that move America’s freight rose almost 40 percent in June, according to preliminary figures released on Wednesday by two firms that track the sector.
According to FTR Intel, orders of Class 8 trucks rose 38 percent in June versus the same month in 2016, after a surprising drop in May. ACT Research put the increase at 39 percent versus June 2016.
Don Ake, FTR’s vice president of commercial vehicles at FTR said in a statement that the June orders “confirm that the market just took a brief respite in May after several stronger-than-expected months.”
“This shows the market is steady, stable and primed for a strong year in 2018,” he said.
After a disappointing market for trucks in 2016 amid high retail inventories and economic uncertainty among truck firms, analysts have predicted higher orders for trucks in 2017 and an even better 2018.
The growth in 2018 is seen being fueled by a federal mandate that truck firms must switch to electronic logs (ELDs) from paper logs in December 2017. Experts predict many smaller truck firms that fudge the books in order to stay profitable in a low-margin industry will close up shop.
That is expected to boost truck orders by larger fleet owners next year.
“We continue to believe that ELDs will take marginal capacity out of the market and shift those volumes toward fleets that have historically been new truck buyers,” Jefferies analyst Stephen Volkmann wrote in a client note on the June preliminary orders.
Reporting by Nick Carey; Editing by Lisa Shumaker