Two of the most relevant statistical series for the plastics industry — and the whole American economy — are the data that measure light vehicle sales and motor vehicle assemblies.
These series are crucial indicators of future demand for plastics parts, molds and tooling, and plastics machinery. They also are important indicators of the state of North American manufacturing and the spending behavior of American consumers.
Through June, the number of light vehicles sold in the United States (domestic plus imports) totaled just over 8.6 million units. This is 1.5 percent higher than the total in first six months of last year. You may recall that the annual sales total for 2015 set the all-time record, so a year-to-date increase of 1.5 percent coming off of a record-breaking year should feel pretty good.
But while nobody is actually complaining, I heard a lot more buzz about the auto industry in 2014 and 2015 than I have heard this year. It seems that auto industry analysts and suppliers get more excited about the rate of growth than they do about the actual sales totals, even when those totals are at or near cyclical high points.
In 2015, sales grew by more than 5 percent, and the data were building momentum in the second half of the year. So far this year, the growth rate is below 2 percent, and the monthly data are losing momentum. The annual total for 2016 could turn out to be the second-highest total ever, but that will likely generate little enthusiasm. It will be just another case of, “What have you done for me lately?”
In my opinion, this is the kind of thinking that creates booms and busts — more is better than less, and sooner is better than later. But alas, all I can do is bear witness. Arguing with the market is rarely profitable.
After taking a close look at the data from the first half of 2016, I am sticking with my forecast for total sales of more than 16.5 million units. This is a decrease of 5 percent from 2015, and it will be very close to the annual total from 2014. I should mention here that all of the analysts and suppliers I heard from were quite pleased with this total in 2014, so it should not be too disappointing if that's the number we hit this year.