Yes, I know all that I and others say about taking figures in isolation and extrapolating from them. But new car sales down 11.5% on last year says two things. First Labour’s polices worked. And second there’s a decided lack of confidence in the economy right now.
I know manufacturing gave optimistic signals this month – but if people aren’t buying that makes little sense.
I remain profoundly pessimistic – unless we do Green Quantitative Easing – which will transform the economy for good.
I read your post and thought to myself “hmmm…car sales…compared to last year…didn’t something exceptional happen last year WRT car sales?”
Then I see this on the Guardian putting your stat in some context:
“New car sales dipped last month compared with the scrappage-boosted figure in September 2009, it was announced today.
A total of 335,246 new vehicles were registered in September 2010 – an 8.9% fall on the total for the same month last year, the Society of Motor Manufacturers and Traders (SMMT) said.
The 2010 year-end new car sale total is now expected to reach two million – slightly up on 2009.
The September 2009 total was influenced by the Government’s car scrappage scheme which was introduced in May last year and which ran until the early part of 2010.
The SMMT said that, with the effects of scrappage excluded, the September 2010 total was was 16.3% ahead of September 2009 and on a par with September 2008.
SMMT chief executive Paul Everitt added: “Despite an 8.9% fall in September registrations, demand for new cars has stabilised and will end 2010 slightly up on last year.”
Based on the Society of Motor Manufacturers and Traders. I would draw a different conclusion from you wrt car sales.
Which is not to comment on Labour policies or Green QE, but simply that it is not really fair to say that car sales are down.
Car sales down 11.5% says Labour’s policy helped the sale of cars, most of which were manufactured overseas and imported. I dont know the exact figure bit something around 25% of cars sold in the UK are made in the UK. the German car scrappage scheme did more for the UK car manufacturing industry than the the UK scheme.
Non-governmental economic output is up as is manufacturing.
@Gary
OK – a blog written at Heathrow on the basis of a BBC News 24 report may not have all the nuances
And yet, they made a fuss for good reason – and that’s that the confidence is not there
Everything I hear confirms that
And I note that the OBR and British Chamber of Commerce share the view…
@Richard Murphy
It’s more than a nuance; the report you heard has thouroughly misled you.
Even including the impact of the scrappage scheme, car sales in 2010 will be slightly *up* on 2009, not down. Adjusting for the scrappage scheme, September was 16.3% up. To argue that both these rises represents a fall is misleading.
But hey, its not the first misleading story. Your wider point is that confidence is not there. I’m sure that’s what you are hearing in the circles you move in, but its not what the data says.
You already know that The Markit/CIPS purchasing managers’ index of manufacturing activity rose to 58 in November, its highest level since September 1994. You presumably also know about the mainstream GDP forecasts:
GDP growth forecast 2010 2011
Bank of England(1) 1.8% 2.4%
OECD (2) 1.8% 1.7%
OBR (3) 1.8% 2.1%
So it seems to me that Markit/CIPS, BoE, OECD and OBR are not forecasting boom time, but neither do they agree that ‘the confidence is not there’.
I suspect your conclusion simply reflects the circles you move in.
(1) http://www.bankofengland.co.uk/publications/inflationreport/irlatest.htm
(2) http://www.oecd.org/document/60/0,3343,en_2649_34109_45267516_1_1_1_1,00.html
(3) http://budgetresponsibility.independent.gov.uk/d/econ_fiscal_outlook_291110.pdf
@Gary
And you fail to mention they’re all downgrading their estimates
Why?
Downgrading estimates are they? Let’s see:
“On average external forecasters have raised their GDP growth forecasts for 2010 and reduced them for 2011…we believe that the unexpected strength of GDP growth in the second and third quarters [of 2010] was largely a timing effect, with firms rebuilding stocks more quickly
than seemed likely in June”
There is no downgrade. Instead there has been a simple timing adjustment which OBR have clearly explained.
http://budgetresponsibility.independent.gov.uk/d/econ_fiscal_outlook_291110.pdf
@Gary
Now let’s offer a wholly reasonable interpretation of that
Labour has boosted growth more than expected in 2010
The Condems will kill it in 2011
ANy advance on that – with reasons?
@Richard Murphy
Well we are both in the realm of interpretation now, but it seems to me to be an entirely non-political point. Firms rebuilt stocks more quickly than expected. That strikes me as an expression of confidence or expectation of future orders based on what firms could see or reasonably expect from July onwards. Not much more or less.
To the extent there is a political overlay (and its not much), all I would say is that the uptick in 2010 relates to an uptick in firm’s behaviour after the coalition where in power i.e from July onwards.