Economic Recovery Gathers Momentum: Car Production Set to Crank Up 69% in Q1 2010
DETROIT FREE PRESS -- After a long spell of cutting production and closing plants, North American automakers are preparing to build substantially more cars as evidence mounts that the economic recovery is gathering momentum.
Collectively, the industry plans to make 2.93 million cars and trucks in North America between Jan. 1 and March 31, according to Ward’s AutoInfoBank, up 69% from 1.73 million built in the first three months of 2009 (see chart above). That’s still less than the 3.58 million vehicles assembled in the first quarter of 2008, but it is still some of the first tangible evidence the long-anticipated recovery is real.
“Despite problems we might still be having in the labor market, these planned output increases do reflect belief that we will see a significant rebound,” said Mark Perry, an economics and finance professor at the University of Michigan in Flint.
Economic data supports the notion that the battered manufacturing sector is beginning to heal. Industrial production increased for the sixth consecutive month in December. The measurement’s 4.5% growth rate for the six months ended Dec. 31, marked the largest six-month gain since early 1998, according to the Federal Reserve. Manufacturing overtime hours averaged 3.4 hours per worker in November and December, according to the Bureau of Labor Statistics, the highest since October 2008.
“The industry expects last year’s hibernation to end,” said industry analyst Sean McAlinden. “The bear will stick his nose out of the tent.”