From Recession to Recovery…Continued

In continuation from our blog on recovery in the auto industry…

Further surprise is shown when taking a closer look at the four states that have recovered to 2007  levels. In North Dakota, Alaska, Texas, and Louisiana employment recovery is attributed to an energy boom. Louisiana also had a low starting point due to Hurricane Katrina. Surpassing its 2007 auto sales by the end of 2011 was North Dakota. Ranked in the top ten and very close to breaking even in their auto sales was Alaska. Of the top four employment recovery states, only these two were on the top ten list for auto recovery.

A key fact is highlighted in these inconsistencies concerning the employment recovery measured by job number. This fact being, all jobs are not created equal. The new or existing job must supply enough income to motivate the consumer to spend the money on a car. If the job does not feature adequate income then a key element is lacking. Despite their strong employment recoveries, Texas and Louisiana have had below average income growth since 2007. This adds some clarity to the lack of car sales recovery in those states. On the other hand, both North Dakota and Alaska rank high in both income and car sales growth. Another comparison would be Colorado and Utah. Both of these states have above average employment gains but are in the bottom ten states for income growth. Consequently, they lack auto sales recovery. In contrast Iowa and Vermont rank in the top for income and car sales growth.

Even with above average income growth and quicker employment recovery paces other states have sluggish car sales. Stimulating the economy, even with quality jobs, may not be enough. The income must be enough to push consumers to spend on large purchases. Durable goods such as autos should be considered when explaining the less advanced auto sales recovery.

If you would like to be a part of this exciting time in the economic incline for the auto industry, check out the inventory of used Toyota cars in St. Louis at your local Weiss dealership today.


Location: 11771 Tesson Ferry Road, St. Louis, MO 63128, USA

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