Trucks, Rail Cars Tote Manufacturing Woes

I've been sharing my concern over the vector and velocity of the domestic manufacturing economy over the past several weeks, and coming out of the July 4 holiday weekend, there's more data confirming that. I'm not talking about the likelihood the U.S. dollar will strengthen as concerns over the future of the euro mount, thanks to the continuing Greek drama, although that is bound to weigh on demand and forecasts. If you're a Doubting Thomas on that, check last week's string of international PMI reports that showed export orders growing inside the healthier parts of the eurozone (Spain, Italy) while new export orders for the U.S. dropped for the third successive month in June.

The data I'm referring to are the June new Class 8 truck orders, which fell for the fourth consecutive month. In total, ACT Research puts the year-over-year drop in those orders at 26%, or 19,900. Month over month, June's new truck orders fell 3%. Some will attempt to chalk up the order decline to the strength in the industry backlog, but new truck orders are tied to industrial production, which has declined over the past several months. With slack in the manufacturing economy, which can be gauged by the drop in manufacturing capacity utilization, it stands to reason that truck companies and other fleets would temper order activity. Not good news for companies like Paccar (PCAR), Navistar (NAV), Eaton (ETN), Meritor (MTOR) or others with meaningful exposure to the North American truck market. (Eaton is part of TheStreet's Action Alerts PLUS portfolio.)...231 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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