Construction Recovery Spurring Medium-Duty Sales

A recovery in the construction industry is powering increased demand for medium-duty trucks, which has led to increased sales, especially of Ford's F-750 Super Duty truck, sources told Work Truck magazine.

Through April, Ford has seen a 2-percent increase in sales of Class 6-7 trucks, which represents the same growth rate for all of 2013. Ford held 30 percent of the market share in those classes in 2012, according to Todd Kaufman, marketing manager at Ford.

As the construction industry has mounted a recovery from the recession, Ford initially saw an uptick in sales in Class 1-3 pickups, Kaufman said, and in the past eight months has seen medium-duty sales improve.

"There's definitely a trickle-up effect," Kaufman said. "It's one-stop shopping at Ford. We're the only manufacturer where you can get Class 1-7 at a dealer."

Ford isn't the only medium-duty truck manufacturer to see a sales uptick. In April, orders of Class 5-7 trucks tracked by ACT Research rose 5 percent over April 2013. About 17,800 trucks were ordered during the month.

The trend shows no sign of slowing down, as the construction industry continues to heat up. Housing starts jumped again in April and new building permits hit its best level since 2008, according to the U.S. Department of Commerce.

April saw a 13.2-percent increase in new construction from March levels, which pushes the annual rate to 1.07 million, the highest level since November. This represents a 26.4-percent increase from a year ago. Single-family home starts added only 0.8 percent, while the remaining increase came in the volatile apartment sector.

Building permits issued, which are an indicator of future home construction, increased 8 percent from March, reaching an annual rate of 1.08 million. This represents a 3.8-percent increase from April 2013. Builder confidence is also rising, according to a report from the National Association of Home Builders (NAHB).

The Association's Wells Fargo Housing Market Index has fallen "more in line with the market reality of a continuing but modest recovery," said Kevin Kelly, NAHB chairman.

Medium-duty truck sales driven by construction activity come in spurts, because builders often purchase trucks once they secure the job, said Bob Johnson, NTEA's director of fleet relations.

"The construction industry is demand driven, so if there's no business there's no reason to buy trucks," Johnson said. "It's very easy for a construction company to park a vehicle. It can sit there for three to four years with minimal aging as long as they take care of it properly. When you get a big contract, you go buy the equipment you need."

By Paul Clinton

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