Why ACT Research Lowered its 2025 Truck Forecasts

The truck market is shifting gears. Orders are slow despite inventory piling up.

• Class 8 truck orders in July: 12,400 units, down 6% month-over-month and 7% year-over-year
• 2025 forecasts for medium- and heavy-duty trucks revised downward
• Record-high inventory levels for Classes 5-7 and Class 8 trucks

Market Dynamics:

1. Inventory Surge

• Strong build rates outpacing retail sales
• Industry backlogs shrinking

2. Shifting Fleet Landscape

• Private fleets gain 6% market share from for-hire carriers since early 2023
• For-hire market faces excess capacity despite rising freight volumes

3. Economic Factors

• For-hire carrier profitability at "generationally low levels" in Q2 2024
• Upcoming elections and potential Fed rate cuts may lead to defensive decision-making

Expert Insights:

Kenny Vieth, ACT Research president:

"The forecast changes are driven by stagnant, and in some cases worsening, fundamentals."

Dan Moyer, FTR senior analyst:

"Despite stagnant freight markets, fleets continue to invest in new equipment, albeit at a slowing pace."

FTR described the decline as "unsurprising," considering the strong order performance in the first five months of the year and the typically weak seasonal order period.

Looking Ahead:

• Pressure on OEMs to reduce build rates intensifies
• Further reductions in backlogs expected
• Year-to-date order levels slightly below historical averages

The truck market's cooling trend reflects broader economic uncertainties. While 2024 forecasts remain optimistic, the industry braces for potential challenges in 2025.

Source: Fleet Equipment Mag 1, 2