Good day,
Consumers remain willing to purchase new vehicles, according to Patrick Manzi, senior economist with the National Automobile Dealers Association (NADA), even as first-quarter sales came in lower-than-expected due to several weather-related events. The first quarter of 2019 will end with sales down between 2 and 3 percent compared to Q1 of 2018, NADA said.
“Consumer confidence is waning, but it remains high and indicates that consumers will still be willing to make large purchases,” Manzi said. “Economic growth is slowing and is expected to return to a more long-term trend level of growth around 2%. Unlike last year, the positive effects of tax cuts will be less pronounced this year. There’s uncertainty surrounding the implementation of tariffs on imported autos and auto parts. However, job gains have been steady and wage growth has been accelerating in recent months, which are both net positives for auto sales.”
Prices continue to rise, Manzi noted, with the average new vehicle transaction price $36,410, up 3.3 percent compared to this time last year. Transaction prices on used vehicles sold by franchised dealers have also risen. The average used vehicle transaction price in January was $20,797, up 4.3% compared to this time last year.
Manzi is sticking to his forecast of 16.8 million new light vehicles sold this year. He added that the light-truck market share is expected to grow to close to 70 percent of the overall light-vehicle market.
Did you know?
Retail sales dropped in February, falling 0.2 percent according to the Census Bureau, but the Institute for Supply Management said that new orders rose for the 39th consecutive month, climbing 1.0 percent to an index reading of 57.4, with gains reported in 14 of 18 sectors.
Quotable:
“The real question now is whether or not this recent weakness is temporary or part of a lasting deceleration in the economy … Updated jobs numbers for March are scheduled for release on Friday, April 5, and will help clarify how much long-term trouble the retail sector is in.”
– Ibrahiim Bayann, FreightWaves’ chief economist
In other news:
At the curbside, Amazon is losing to Walmart, Target
Amazon (NASDAQ: AMZN) may be dominating e-commerce, but when it comes to curbside grocery pickup, it is losing to its retail rivals. (Bloomberg)
Saskatchewan Trucking group opposes carbon tax
The Saskatchewan Trucking Association has expressed its opposition to a carbon tax imposed in Canada, saying fleets were not properly notified and the cost to comply will be steep. (The News-Optimist)
UK logistics company launches new intermodal business
UK-based logistics company Maritime Transport has launched a new intermodal business that will run daily freight trains from Southampton and Felixstowe to inland terminals. (Railway Gazette)
Air cargo demand keeps falling
Air cargo demand in February fell again, dropping 5.8 percent year-over-year with Asia Pacific posting the largest drop, down 6.8 percent. (Air Cargo News)
From bikes to natural gas, UPS charts a course beyond diesel
UPS is building a large alternative fuel fleet, from bike couriers to natural gas trucks. (GreenBiz)
Final Thoughts
There is much debate ongoing about what state the economy is in. Is it declining, is it in freefall? Last week at the ACT Research conference, FreightWaves talked to a number of people who themselves as not sure. About the only consensus was that it depends on which data points you put the most value in. Most seemed to agree that the economy is still showing positive gains, just not as large compared to a year ago, bringing up an interesting question: Could we talk ourselves into a recession simply because we are looking at year-ago comps and drawing the wrong conclusion on the economy?
Hammer down everyone!
