AUTO SALES, PRODUCTION AND EMPLOYMENT
Auto and light truck sales for September was just reported at a rather strong 14.96 million units. This puts sales back above the strong trend line for this recovery.
But it might be more interesting to look at production that has also been very strong.
Since production bottomed during the cash for clunkers program industrial production of autos and light trucks has risen more that 150% . Remember, the original rational for the cash for clunkers program was to reduce excess inventories so that the auto firms would expand production.
But an even more interesting comparison is to compare total vehicle output — including light and heavy trucks as well as parts — to employment in the production of motor vehicles. Total output is now at new all time record highs, surpassing the early 2000s peak. But employment in the motor vehicle industry is now 780,700 as compared to 1,330,000 in February, 2000 and 651,100 at the recession bottom. So since the recession bottom employment in the industry is up 21% while production is up over 150%.
As the graph on employment suggests, we’ve a long ways to go; dealerships remain down by roughly 200K though parts retail remains more-or-less flat. I wrote a post on that last December 2011 in my autos and economics blog including data on sales volume alongside unit volume and employment. Things fortunately are better, as per the description of the Sept 2012 numbers. But qualitatively … we’re not yet half full. It’s not so much that times are good as that they have been much worse.
I suspect that the auto employment reflects the replacement of humans with automation due to this and redesign it takes less work time to build a car, thus fewer workers to produce the same number of cars. Actually I sort of wonder when it will happen more widely in construction, looking at homes, what if lumber was all pre-cut and wall segments were built in a factory?
The data on employment and output imply unbelievable productivity growth in the auto sector.
I suspect it is the widespread use of robots.
Maybe some of it is increased use of imported components that are not accounted for in these measures of output.