While the jury is still out on exactly how school district bus purchases will be affected by the $85 billion sequestration signed last week by President Obama after Congress failed to act on reducing the deficit, medium-duty commercial orders, which include school buses, remain on the uptick. At least for 2013-2014 school year, according to a leading commercial vehicle market analyst.
ACT Research released its preliminary figures for February that show Classes 5 through 7, which include most school buses, "exhibited strong growth."
"Medium-duty orders easily outpaced both January 2013 and February 2012," said Kenny Vieth, president and senior analyst at ACT. "February's volume was up 13 percent versus last year."
He added that net orders for Class 5 through 7 were similar to the trends shown for Class 8 vehicles, which ACT Research said are expected to be the best in the past 13 months.
"Classes 5 through 7 net orders above February's built expectations suggests backlogs are likely to have moved higher," Vieth added.
Steve Tam, vice president of ACT Research's Commercial Vehicle Sector, told STN that sequestration, or the seizure of federal funds earmarked for education, military, health and human services and other programs in an attempt to reduce the deficit by $1.2 trillion over the next decade, is unlikely to "have a significant, measurable impact on school bus demand" because most of those funds are derived from local property tax revenue.
"While that's a gross oversimplification, it speaks to the potential impact of sequestration on demand and our view that it will likely be small," Tam added. "Adding to that, since the acquisition cycle/funding cycle has such long lead times, any impact will likely be lost some time in the future."