Microchip shortages still hampering vehicle sales
While a step in the right direction, the number of units sold at the start of 2022 was 18% lower than in January 2020
By Rob Roach, ATB Economics 15 March 2022 1 min read
When individuals and businesses are buying more new vehicles, it’s a sign that something is going right in the economy. More sales means more demand for all the inputs that go into manufacturing vehicles and a higher level of confidence among buyers that they can afford the purchase. Robust sales are also good for the auto sector and its many employees and investors.
Given the above, how are new vehicle sales doing? Data up to January 2022 were just released and show that new vehicle sales in Alberta remain weak.
On the bright side, the number of vehicles sold in the province in January 2022 was 1% higher than the previous January.
While a step in the right direction, the number of units sold this January was 18% lower than in January 2020 and 29% below the peak set in January 2008. You have to go back to January 2005 to find a lower level during the first month of the year (other than January 2021).
The lackluster sales are due in part to supply chain disruptions and a global shortage of microchips. This does not reduce the negative effects of low sales on the economy, but it does temper the concern that the numbers are a red flag regarding weak consumer confidence.
At 15% higher compared to a year earlier, the bounce back in the number of new vehicles sold in Canada as a whole in January was stronger than in Alberta. The national figure, however, reflects a larger drop in sales during the pandemic and, as such, a larger gap to make up.
Answer to the previous trivia question: According to the United States Department of Agriculture, 788.01 million tons of wheat are forecast to be consumed globally in the 2021/22 marketing year.
Today’s trivia question: How many new motor vehicles were manufactured globally in 2021?