If the heavy-duty truck market is any indication, there could be a bit of a cloud break on the horizon for school bus manufacturers, according to a preliminary report released today on Class 8 truck orders. That is, if somehow school budgets can turn around fast.
Last month, total net orders for all major North American truck OEMs rose to 10,505 units, a 36 percent jump from February and 21 percent higher than orders in March 2009. The figures were courtesy of FTR Associates, a transportation research and equipment forecasting company in Nashville and reflected sales in the U.S., Canada, Mexico as well as for exports.
Eric Starks, president of FTR, called the data “encouraging,” but the company refused to change its 2010 outlook for the trucking industry. On the school bus side, manufacturers grimly forecast late last year that production levels during the 2009-2010 manufacturing year, which ends Oct. 31, will fall to just 28,000 units from the 36,975 school buses produced last year.
The economy, while showing signs the the Great Recession is over or is headed in that direction, is largely to blame with reduced bus and truck manufacturing. But EPA regulations for cleaner burning diesel engines that went into effect this year aren’t helping. We’ve heard as much from school bus experts, and FTR’s Starks added that the same holds true for Class 8 trucks, which will see “essentially flat” demand this year compared to last.
It would stand that the same will hold true for the school bus industry and will extend at least another year, judging from the historic lag in feeling the harshest economic effects based upon school district budgets and state education appropriations, not to mention how property taxes trickle down to schools. If that’s not enough, starting in September 2011, school districts across the nation that need to purchase new Type A small school buses will see costs again increase tied to a NHTSA mandate for three-point, lap/shoulder belt restraints. Meanwhile, the federal recommendations for equipping large buses with the seat belts also goes into effect. The school bus manufacturers have cited cost increases of between $7,000 and $16,000.
