MIDLAND, Mich. – As one of the most valued, competitive and entrepreneurial segments of the U.S. economy, the motor vehicle aftermarket stood out as a winning segment, delivering healthy profits, high employment rates and economy-boosting direct or indirect service for more than 185 million vehicles in the United States during 2014.
That’s according to the latest edition of the Northwood University Monthly Economic Outlook released by Northwood University in Midland, Mich. The monthly report examines the U.S. aftermarket’s outlook for 2015. It includes excerpts from a presentation that Economic Outlook author Timothy Nash delivered at the 2014 AAPEX Show last fall in Las Vegas.
“In 2014, the industry added an estimated $360 billion to U.S. gross domestic product (GDP). If the U.S. motor vehicle aftermarket were a free, independent country, it would be the 32nd largest economy in the world, slightly larger than Hong Kong,” said Nash, who is vice president for strategic and corporate alliances and the Fry Endowed Professor in Free Market Economics at Northwood University. “My crystal ball sees a bright 2015 for the U.S. motor vehicle aftermarket.”
Despite this year’s rosy prediction, Nash cautions that industry leaders will need to manage bottom lines “more frugally than ever” to maintain or gain an edge in both the world’s largest and most competitive motor vehicle market and the larger U.S. economy, which continues to deliver mixed signals in respect to its health and recovery.
Recent revised data from the U.S. Bureau of Economic Analysis (BEA) reported that the second estimate of fourth quarter 2014 U.S. GDP grew only 2.2 percent. Many economists predicted it would come in at 2.9 percent or higher. It’s also “considerably lower” than the BEA’s advance estimate, which predicted 2.6 percent growth for Q4 2014, Nash noted.
“Once again it looks like the U.S economy, as a whole, will have provided no clear direction,” he says. “It had disappointing first and fourth quarters in 2014, bookended by impressive second and third quarters of GDP growth. Adding to the corner is the fact that the Conference Board’s measure of consumer confidence fell 7.4 points to 96.4 in February 2015. The University of Michigan’s Survey of Consumer Sentiment also declined in February.”
For a more in-depth look at the study’s results, including job growth and labor statistics, check out the latest Northwood University Monthly Economic Outlook available at the university’s virtual Free Market Library: Northwood University Economic Outlook March 2015 here. <>.
