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Enthusiasm for new vehicles returns—almost—to record high

Enthusiasm for new vehicles returns—almost—to record high

Posted on: 10/3/2018 | Author: ATB Financial's Economics + Research Team

One of the best barometers of consumer optimism is new vehicle sales. And in Alberta, the value of those shiny new cars and trucks has returned to record-high territory.

The graph below shows the value of dollars spent on new vehicles in Alberta, averaged over the previous 12 months. This averaging smooths the data and gives a better overall picture of what is happening over time since monthly data tend to be volatile and subject to seasonal variations.

The peak of new vehicle spending happened at the beginning of 2015, just as oil prices had started to slide. In the 12 months leading up to February 2015, monthly spending on new vehicles averaged $952 million—a record high.

The recession took its toll on Albertans’ enthusiasm for new cars and trucks, however. By October 2016, the 12-month average had fallen to $782 million — a drop of 18 per cent from the peak.

Recently, however, spending has ramped back up. In the 12 months ending July 2018, average monthly spending reached $934 million. That’s not quite as high as 2015, but it’s getting close.

However, higher prices are also a factor. Between the peak of February 2015 and July 2018, there’s been nine per cent inflation on the price of new cars and trucks in Alberta. So even if Albertans are spending nearly as much on vehicles today, they may not be getting as much bang for their buck.

New motor vehicle sales, Alberta

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