New truck orders, used truck sales volume, used truck prices, and industrial production all stopped increasing in November. We consider the trucking data to represent a seasonal slowdown as buyers have completed the bulk of their new and used purchasing for the year, locking in tax benefits. Industrial production is probably also exhibiting some seasonality, with an impact from reduced automotive manufacturing. We expect the truck market and general economic factors to regain upward momentum in early 2012.

As has been reported in trucking media, new truck orders were down roughly 6000 units in November vs. October, about a 30% decrease. This decrease follows multiple months of increases. There is a relatively substantial tax incentive for buyers to complete orders before the 2012 fiscal year, namely the Section 179 benefit that allows for generous depreciation of equipment. This benefit will be reduced in 2012. Combine this factor with the relatively long lead times for trucks ordered now, and there does appear to be a rationale for a tax-related seasonal slowdown.

As for used trucks, retail selling prices in general began to level out in October. Average price for sleeper tractors flatlined despite lower average mileage, which has only happened in one month out of the past two years. Used trucks are no longer seeing explosive growth in pricing, although they have not declined much if at all on average. The graph below outlines movement over the past three years. Keep in mind that the data is a two-month moving average, so the flatline in prices for October is not yet evident.

Sales volume at the dealership level was off by about 6% in October, and looks to drop by a more substantial amount for November. Sales data from all retail sources was up for October, though, so we are not yet calling a major market shift on the volume side.

As for domestic manufacturing, the critical Motor Vehicles and Parts segment was down a relatively notable 3.4%, undoing last month’s gain. Consumer durables and non-durables were down 1.4% and 0.2%, respectively. Other segments of manufacturing were mixed, with no clear conclusions to be drawn.

With no major new developments on the domestic or international stage, we are considering this market behavior a seasonal slowdown. Used truck pricing should regain some upward movement in early 2012. We do not expect to see any real decreases in used truck pricing for the foreseeable future.