The news about the U.S. economy seems to grow brighter all the time. The most recent figures for U.S. first-quarter gross domestic product show an increase of 3.2%, much higher than the 2.5% economists had predicted. Many had been gloomy given the fact that there was a prolonged government shutdown early in the year. The news is good, however, and with increased GDP and decreased unemployment, it’s looking brighter for the general population of workers and their families. This certainly includes business owners. How has the 2019 economy affected your auto repair shop so far?
Economic Stats for the 2019 Economy
As stated above, the big news was that GDP was up 3.2% in the first quarter. Exports also rose 3.7% while imports decreased 3.7% which is great for American manufacturing.
Personal spending also increased 1.2%. Spending on services and nondurable goods increased, offsetting a decrease in spending on durable goods. Disposal income increased by 3%, more than double what inflation was in the first quarter.
Additionally, consumer confidence rebounded in April and was up more than forecasted. Consumers’ assessments of current business conditions improved as did their opinions of the labor market. The percentage of people who, when polled, said that jobs were plentiful increased from 42.5% to 46.8%. Only 13.3% stated that jobs were “hard to get.” Given that the unemployment rate was at the historically low rate of 3.8% in March, the optimism was understandable. Wages are also growing at a rate of 3% annually without an increase in inflation.
Lynn Franco, Senior Director of Economic Indicators at The Conference Board, stated: “Overall, consumers expect the economy to continue growing at a solid pace into the summer months. These strong confidence levels should continue to support consumer spending in the near-term.”
What’s more, almost 20% of consumers polled said that they expected business conditions to improve this year and be better than they are now in 6 months. Back in September we asked, “How’s the Trump economy working for your auto repair shop?” The economic numbers were good then, and small business owner confidence was high.
Six months later, small business owners are slightly more bullish about the economic outlook according to the spring 2019 Bank of America Business Advantage Small Business Owner Report. Some are nervous about the possibility of a recession. Still as far as their outlook for the next 12 months, they continue to be optimistic with:
- 67% planning to expand their businesses
- 59% believing their revenue will increase
- 24% planning to hire more workers
- 12% planning to borrow money to improve or expand their businesses
All of this means that the average person is feeling much more confident about the economy and his ability to find a job and get paid enough money to make purchases of goods and services. Business owners are looking at expanding or improving their companies and hiring more workers. Consumer confidence should result in more traffic in auto repair shops. Business owner optimism and spending will have a positive impact on the economy as well. A rising tide lifts all boats, as they say.
What is your experience with the 2019 economy like? Do you feel positive about the economy or nervous about the possibility of a recession? Are you planning on making investments in your company’s equipment or infrastructure? We would like to hear if your opinion as an auto repair shop owner or manager confirms or refutes the above polling. Weigh in below or in our forums!