If a light exists at the end of this recessionary tunnel, it is sure taking its sweet time getting here. After a momentary production spike reported in this space last year, total school bus manufacturing output fell again during the recently concluded 2010-2011 production year, this time by more than 25 percent.
The indication is what many have known to be true — namely, that state and local fiscal pressures continue to thwart the ability of customers to order new vehicles.
In fact, since the 2006-2007 production year, the end of which coincided with what is thought to be the formal beginning of the Great Recession, this sector has fallen off by 37 percent. This means nearly six fewer school buses are being manufactured today per every 10 that rolled off the production line just six years ago.
It’s important to note that School Transportation News’ annual survey of the seven school bus manufacturers only tracks the number of units that leave each manufacturing plant and not the actual number of buses sold. While the vast majority of the output goes toward filling orders placed by school bus operators, several of the OEMs also fulfill orders made via the General Services Administration, which supplies school bus vehicles to transport adults as well as children for the armed forces domestically and abroad or to service Department of Justice activities. School buses are also sold for export.
With Ford unable to report data at press time, STN calculated that about 30,304 total school bus units were produced during the 2010-2011 production year — the most dismal figures since the 1980s. As the Type C conventional segment goes, so does the rest of the market. Type C school buses represent the largest piece of the production pie, accounting for 60 percent of total production numbers on average. Only 18,713 conventional school buses were manufactured in 2010-2011 compared to 25,791 the prior year, a 27 percent decrease year over year.
Right there alongside Type Cs in recording a 16-percent decrease was the Type A small bus market, not coincidentally the second-largest segment of annual production. The past year saw 7,411 of these vehicles manufactured, the fewest since 6,313 came out during the 2006-2007 production year.
But the hardest hit segment was Type D transit-style school buses, which was down 30 percent to only 3,940 units. Only 2008-2009 has been worse the year over the past decade, when 4,689 of these buses rolled off the line.
Amid such numbers, school bus manufacturers have generally been pessimistic in their annual forecasts, and rightly so, predicting anywhere from 20- to 30-percent less output each of the past several years. That holds true for the current production year, which began on Nov. 1 and runs through the end of this coming October, as well as for the immediate future.
It will be interesting to see how output will be affected by new large bus manufacturer Lion Bus’ plans to expand throughout North America. And with Starcraft expected to roll out its own new Type C line sometime in the next year, will competition spur additional innovations designed to bring viability to customers?
It’s more than simply conjecture that a fix to education funding nationwide and certainly at the state level must occur to truly spur regrowth in this market. A true test could be if the housing market rebounds, a public policy matter that strangely has escaped the polarizing political discussions across the country. School budgets are, after all, intrinsically tied to property taxes. Once the housing bubble burst, it was no surprise that, as with the rest of the economy, school bus production went into the tank.
As North Americans once again turn back their clocks this coming fall, it remains to be seen if the industry can achieve some momentum as it also attempts to turn back its own clock with respect to pre-recession numbers that were in the high forty-thousands as little as five years ago. But, as we all know, a lot has changed since then. Perhaps, as more than one manufacturer told us, the school bus market might never again fully return to its former self.
In addition to this survey, STN approached each school bus manufacturer in the third and fourth quarters of 2011 and invited them to submit outlooks for the new year with the hope of shedding light on what opportunities exist in the market despite the burdensome economy. This is a focus of both our editorial this year and the theme of the 19th Annual STN EXPO this summer in Reno, Nev. Those open letters to the industry begin on page 20.
Certainly, offering innovative solutions to student transporters that are viable and affordable to their operations is paramount.
Reprinted from the 2012 School Transportation News Buyer's Guide. All rights reserved.