Aftermarket Insider Issue 73 - (Page 20)
MA R K E T I N T E L L I G E N C E
DATA POWER
AAIA Market Intelligence:
Don’t Do Business Without It!
Overview of November AAIA Industry Indicators Report (IIR)
The U.S. economy continues
to show signs of an uncertain
future. By looking at a select
few pieces of data, one would
come to the logical conclusion
that the U.S. economy
is on its way to a strong and
healthy recovery. Such data
includes industrial production,
capacity utilization and
disposable income figures
which are all trending upward.
Perhaps the largest encouraging
factor of late was the October
stock market performance.
In October the Dow soared
1,300 points (12.2 percent)
which was its best one month
performance in more than 20
years. Although most of it was
given back in November, it has
since bounced back in early
December. Concentrating on
different metrics could lead one
to the opposite conclusion: a
future dominated by a second
recession and struggling U.S.
producers, consumers and
investors. Metrics like rising
inflation, which has remained
north of 3.5 percent since April,
and plummeting consumer
confidence, which in October
reached its lowest level since
March 2009, both signal a
second recession. Furthermore,
the second estimate for third
quarter GDP came in at 2.0
percent, which was downwardly
revised from the
advance estimate of 2.5 percent.
With GDP being outpaced by
Industry Indicators Assessment Summaries as of Oct. 2011
Auto Retail Report
Favorable condition for automotive aftermarket = 6
Indeterminate trend-should monitor = 9
Unfavorable condition for automotive aftermarket = 8
Data not available = na 0
Auto Parts Manufacturing Report
9
6
8
0
July Aug. Sept.
10
4
9
0
Favorable condition for automotive aftermarket = 6
Indeterminate trend-should monitor = 8
Unfavorable condition for automotive aftermarket = 9
Data not available = na 0
Heavy Duty Aftermarket Report
July Aug. Sept.
11
3
9
0
10
4
9
0
Favorable condition for automotive aftermarket = 6
Indeterminate trend-should monitor = 5
July Aug. Sept.
8
2
7
4
Unfavorable condition for automotive aftermarket = 11
Data not available = na 0
12
0
11
0
inflation, serious red flags are
raised. While the purchasing
managers index remains above
50, and thus continues to give
a positive outlook, it is down
nearly 17 percent from the
beginning of the year and has
flirted with dropping below 50
over the last several months.
With conflicting data such as
this the need for careful and
thorough analysis is paramount.
A key indicator for the
economy and the robustness
of the automotive aftermarket
is miles driven. In September
2011, miles driven decreased
7.1 percent relative to August
2011 and by 1.4 percent relative
to September 2010. This
is the seventh straight month
miles driven has decreased
relative to the same month of
the previous year — a very
pessimistic trend for the automotive
aftermarket. Perhaps
a positive side, however, is
this: miles driven is expected
By Dr. Timothy G. Nash
to slide at this time of year
and last year between August
and September miles driven
slipped over 7.3 percent while
gas prices were under $3.00
a gallon. This is a steeper fall
than the current one in 2011
even though today gas prices
are still averaging over $3.50
a gallon around the nation.
In general, the report clearly
demonstrates a decrease in
conditions favorable to the
automotive aftermarket from
10 to nine. It also shows a
decrease in conditions unfavorable
from nine to eight from
August to September. While
there was a decrease in the
number of conditions favorable,
the number of conditions
unfavorable also decreased
in September. For this reason
we maintain our position
of“uncertain” for the outlook
of the U.S. economy and the
automotive aftermarket.
The Industry Indicators Report gathers and summarizes key automotive aftermarket data and divides it
into the following three categories: automotive retail, automotive parts manufacturing and the heavy
duty aftermarket. The purpose of this monthly overview is to provide a quick synopsis of the U.S. while
taking some of the data in the Industry Indicators Report and applying it for thoughtful discussion and
decision making.
Dr. Timothy G. Nash is a vice president and the Fry Chair in Free Market Economics at Northwood
University. The Industry Indicators Report is prepared monthly under Dr. Nash’s supervision with
assistance from Northwood University economics major Adam Matzke, and funded by AAIA’s
Northwood Scholarship program.
The Industry Indicators Report is an AAIA member-only benefit. Research is posted in the Knowledge
Center on the AAIA website at www.aftermarket.org/knowledgecenter, and is accessible through AAIA
username and password. For assistance, contact the AAIA membership department at 301-654-6664.
20 | AFTERMARKET INSIDER | VOLUME 73
http://www.aftermarket.org/Publications/TrackingTheTrends.aspx
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Table of Contents for the Digital Edition of Aftermarket Insider Issue 73
Aftermarket Insider Issue 73
Contents
President's Message
AAPEX News
Success Happens When YOU ARE HERE!
AAPEX 2011: A Show to Remember
Member Profile
Toolbox: What’s Your Sign?
Association News
Market Intelligence
Segment News
Technology Update
Hot Dates
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