Despite some larger macro-economic concerns, auto dealers are set for another great year of solid growth, solid employment gains and “really good auto sales,” said NADA Chief Economist Patrick Manzi during his Saturday session at the NADA Show Live Stage.
All dealership departments saw “significant gains,” especially compared to COVID-impacted 2020 numbers. Dealerships hit a new sales record of $1.18 trillion, representing 18% of all retail sales across the country.
While employment levels fell dramatically at the start of the pandemic, many dealers were able to take advantage of federal Paycheck Protection Plan (PPP) loans and bring back employees, a trend that Manzi said will continue throughout the rest of the year.
In fact, the recovery of the labor market may be “the best story out there,” Manzi said, noting that the nation had recovered many of the jobs that were lost at a much quicker rate than after the previous recession.
“It took us over six years to get back all the jobs lost,” Manzi said. “Currently, we are on track to have all the lost jobs back by the end of this year. It has been a remarkable recovery.” As of December 2021, there were 1.7 job openings for every unemployed person.
One cloudy spot: consumer sentiment, which is the lowest it’s been since 2011. Manzi listed several factors, including the “everything shortage” caused by supply-chain constraints, price increases for many consumer products, and an overall “concern that their wage gains are going to be eroded by inflation, despite really solid wage gains we’ve seen throughout the year.”
The Federal Reserve is doing all it can to tame inflation by raising rates, and by the end of the year, Manzi forecasted, “We’ll see consumer prices come back down.”
Nevertheless, the country will continue to see robust economic growth, Manzi said, and “real GDP growth will still be high compared to the long-term average. I’m forecasting 3.5%-4%. In 2023, we’ll return to long-term trend growth rate of 2%-2.5%.”
Catch more of Manzi’s session in the video below.