Signals of a Recovering Economy . . . – UnderhoodService

Signals of a Recovering Economy . . .

It’s been said that the economic recession largely bottomed in the spring and its long-awaited end will occur later this year.

A sign that some analysts say signals the start of an economic recovery for the second half of 2009 is that the U.S. index of leading economic indicators has risen for three straight months. Many analysts predict the economy will start to grow again — at about a 1.5 percent pace — in the July-to-September quarter.

We’re getting good vibes, too. In mid-July, polled its readers (manufacturers and suppliers of aftermarket parts and service equipment) about whether they were seeing any positive signs of recovery in their businesses. Thirty-four percent reported positive results, said Amy Antenora, editor of, while almost 24% said they are expecting to see good results soon. The breakdown of results is as follows:

Is your business starting to bounce back from the recession?
Yes: 34.21%  
No:  31.58%

I believe my business will bounce back soon: 23.68%.  

These somewhat positive responses about the economy should be good news for repair shops. The full impact to the aftermarket of other recent news-making items, such as Cash for Clunkers, dealership closings and fluctuating gas prices are yet to be seen.

While pump prices rose at the end of July to a new national average of $2.47 a gallon, it’s priced at a big discount over last year, when the national average was above $4.00. And with so much unused gasoline in storage, analysts say prices should be heading even lower.

How will gas prices affect the independent service and repair sector?
“Lower gas prices are a benefit for sure,” says Chris Klinger, co-owner of Precision Inc. in Tucson, AZ. Hopefully, it will allow people to catch up on some of the preventive maintenance they put off last year when gas prices were higher, Klinger continues.

“We have not seen an increase in ‘discretionary maintenance’ or ‘elective repairs’ when fuel prices dropped earlier in the year,” says Mitch Schneider of Schneider’s Automotive in Simi Valley, CA. “I’m not sure we’ve seen as many vehicles towed in…or, towed out! And, generally, when they are towed out…they are going back to the house and not to another shop for a cheaper repair.”

Bob Dowie, owner of Village Auto in Chester, NY, comments: “Luckily for us, most of our customers practice preventive maintenance and are in a financial position to handle unexpected (repair) surprises. For the folks who never seem prepared for the unexpected repairs, lower fuel prices will do little to help them.”

If you’d like to comment on how gas prices are affecting the vehicle preventive maintenance habits of your customers, or share your thoughts on the economic recession/recovery, send me an e-mail and we’ll post your comments on our website.

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