Tuesday, October 04, 2011

Truckonomics: Truck Sales Shift Into High Gear

More than 7 million light trucks were sold in September, which was the highest monthly sales count for trucks in 3 and-one-half years going all the way back to March of 2008 (see chart above).  September truck sales were up by 9.5% compared to August and up by 20.3% compared to last September.  Why are truck sales important? 

According to AutoNation Chairman and CEO Mike Jackson:

"I've always said, when you want to know when this economy is going to turn, just watch the pickup sales.  All those sales are small businesses and entrepreneurs, and when they see the prospect for better business, they're going to go out and finally buy a new pickup truck. So this is a key indicator of what's going on in the U.S. economy.  This is small business America saying that the worst is over, I see opportunities in the future, I feel confident enough to go out and buy a new truck.    

Pickup trucks are bought by small business entrepreneurs who have their finger on the pulse of the U.S. economy. It's an expression of confidence in the future of the economy. They don't buy until they see the prospects for business are brighter."

And according to this Associated Press report:

"If you want a hint about the economic recovery, follow that truck. Pickups are a kind of rugged indicator of the nation's financial health. When times are good, contractors buy more of them to carry tools around for landscaping and lumber to build homes. Weekend haulers also gravitate to them even though cars get better mileage."

MP: What double-dip?

(Thanks to Scott Grannis for the data.)

8 Comments:

At 10/05/2011 4:21 AM, OpenID American Delight said...

I'm not totally sold on this one.. The sales are encouraging, but it doesn't necessarily suggest "confidence in future of economy." It suggests confidence in your bank account right now.

 
At 10/05/2011 6:09 AM, Blogger M said...

This is assuming a causality. Another reason may be a rejection of the new designs which are smaller and lighter in order to meet CAFE standards. Pick-ups survive crashes better than prius's.

 
At 10/05/2011 8:02 AM, Blogger Mike said...

Or it could be that all the unemployed white collar workers who are mowing lawns right now need something to haul the grass clippings in.

 
At 10/05/2011 8:21 AM, Blogger morganovich said...

what double dip?

how about this one:

Employers announced 115,730 planned job cuts last month, more than double August's total of 51,114, according to the report from consultants Challenger, Gray & Christmas, Inc.

The figure was the highest since April 2009 when 132,590 layoffs were announced.

September's job cuts were also much higher than the same time a year ago, tripling from the 37,151 job cuts announced in September 2010. For 2011 so far, employers have announced 479,064 cuts, up 16.5 percent from the first nine months of 2010.

to look at that truck data, one might also be forgiven for asking "what recovery?". has there ever been a period since these records began in which light truck sales were still so far below pre recession levels so long after the recession was claimed to have ended?

i don't think so.

 
At 10/05/2011 9:58 AM, Blogger morganovich said...

http://cr4re.com/charts/charts.html?GDP#category=GDP&chart=ISMServicesSept2011.jpg

ism employment index goes into contraction.

i don't think this has ever happened before and not been a harbinger of recession.

 
At 10/05/2011 10:02 AM, Blogger Buddy R Pacifico said...

The best selling pick-up is the F-150 series Ford. The best selling engine in the F150 is not the V-8 anymore. The V-6 EcoBoost engine was chosen by 57% of buyers in September.

The innovative EcoBoost engine is available in 3.5 & 3.7 liters vs. 5.0 for the V-8. This engine is twin-turboed and software meshes with a six-speed transmission for torque performance.

Fuel mileage is much better than the V-8 but stepping on the gas heavily saps mileage via the turbos.

 
At 10/05/2011 10:11 AM, Blogger Bill said...

It seems to me that pick up sales will not fully recover until we have a meaningful recovery with real estate. Not many contractors are buying new trucks these days, I would imagine.

 
At 10/05/2011 7:10 PM, Blogger Craig said...

Once upon a time, pickup trucks were predominantly owned by small businesses, but given the government's constant interference in the market, they are now solidly family cars. I don't think your pickup-truck-index fits. Virtually everyone owns a pickup now -- big, heavy, powerful. Everything American cars aren't anymore.

As Obama's unrealistic fuel mileage goals for light trucks draw nearer, look for pickup sales to soar. Just don't expect any subsequent improvement in the economy. The correlation ain't there.

 

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