Results of the joint Business Confidence Index for October 2012, show that aftermarket business leaders were roughly four times more confident in the future of the automotive aftermarket over the next 12 months, than they were regarding the economy in general, reports AAIA and Northwood University.
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- The overall AAIA/Northwood University Automotive Aftermarket Business Confidence Index for October was -5.77, an improvement from September’s reading of -15.94 in September (see Chart 1), placing aftermarket business leaders in the high range of the “slightly less confident” category at -5.77 (see Table 1).
- The overall AAIA/Northwood University Automotive Aftermarket Economic Confidence Index for October was -23.73, down slightly from -23.19 in September marking the sixth month the index has been negative since November 2011 (see Chart 2) placing aftermarket business leaders on the low side of “slightly less confident” in the economy as a whole in October (see Table 2).
“It is evident aftermarket leaders had more confidence in the industry in October compared to September of this year but are still concerned,” says Dr. Timothy Nash, Northwood University. “It is also obvious that business leaders were not confident regarding the overall economy in October. We believe a continued weak European economy, a slowing Chinese economy and an actual monthly decline in miles driven from August to September 2012 and a year ago, are the primary reasons for disappointing confidence among aftermarket leaders in their business. The historically higher than average gasoline prices are also placing a drag on the economy and aftermarket at this time as well but gas prices continued to decline in November. The negative trend with regard to our national debt and that of Europe was worsened by challenging U.S. fundamentals in October with a better than expected revised third quarter GDP report for November showing GDP growth of 2.7 percent up from the second quarter growth for the U.S. The most recent miles driven data shows a slight decrease in miles driven from August to September 2012. A positive resolution to the ‘debt crisis’ discussions in Washington D.C. and around the globe, 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 (see Chart 1).”
The twenty-third installment of the survey was sent to members on Dec. 6, 2012. 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.