Automotive aftermarket business leaders upbeat about economy

According to May results of AAIA/Northwood University Business Confidence Index, business leaders were positive on the economy and more confident in the future of the automotive aftermarket over the next 12 months, reports AAIA and Northwood University.

AAIA members completed the twenty-ninth monthly index survey and, according to the data:

• The overall AAIA/Northwood University Automotive Aftermarket Business Confidence Index for May was 20.27, up from the April reading of 18.75, placing aftermarket leaders in the mid-range of the “slightly more confident” category.
• The overall AAIA/Northwood University Automotive Aftermarket Economic Confidence Index for May was 12.16, down from the April reading of 16.67 and marking the 5th month the index has been positive since March 2012 thus placing aftermarket business leaders on the low side of “slightly more confident” in the economy as a whole in April.

“It is clear aftermarket leaders had more confidence in the industry in May compared to April 2013 yet are still concerned,” said Dr. Timothy Nash, a professor at Northwood University. “It is also obvious that business leaders were slightly less confident regarding the overall economy in May. We believe a continued weak European economy, a slowing Chinese economy and a decline in miles driven from a year ago are the primary reasons for generally disappointing yet improving confidence among aftermarket leaders in their business.

"A 0.13 percent increase in March to April 2013 miles driven gives us some pause for optimism. The historically higher than average gasoline prices give us reason for concern in the economy and aftermarket at this time yet gasoline prices declined slightly in June 2013. The negative trend with regard to our national debt and that of Europe was worsened by mixed U.S. fundamentals in June and a lower than expected first quarter 2013 final revision of U.S. GDP report, showing GDP growth of 1.8 percent down from an expected 3.2 percent.

"The most recent miles driven data shows a slight increase in miles driven from March to April 2013 and it also shows a decline in miles driven in April 2012 relative to April 2013. A positive resolution to the sequestration debate in Washington D.C. and debt crisis around the globe, and the adoption of a rational and predictable tax policy in the U.S. would help to offset high world oil prices and enhance aftermarket business confidence in the coming months.”

The30th installment of the survey was sent to members on July 8, 2013. Results will be calculated monthly and reported in AAIA SmartBrief. Member responses will be used solely in the aggregate and for the purpose of providing empirical information.

For more information, contact AAIA market intelligence at 301-654-6664 or Dr. Timothy G. Nash, Northwood University at 989-837-4323. These indices are prepared monthly by Dr. Nash and Northwood University aftermarket major, Matt Fusco.