Each month, our Used Vehicle Retention Index tracks the retained value of two- to six-year-old vehicles in the Canadian marketplace, beginning in January of 2005. The Index compares how a used vehicle today stacks up to its original MSRP.
Big ticket items are increasing in price as consumer confidence continues to rise, according to Canadian Black Book.
August has continued the relatively stable wholesale price trends from July. This past week, Canadian Black Book’s analyst team noted that the Truck/SUV/Crossover segments saw increases in wholesale prices of 0.28%. Car segments did not fare quite as well and declined in value by a very slim 0.04% for the week.
The Conference Board of Canada reported at the end of July that the Index of Consumer Confidence moved up by up 2.8 points in the month to 82.5. The direction of the index is positive, but it is much less than the double-digit increases seen in May and June. Black Book says consumer confidence is critical for the purchase of large ticket items (consumer durable goods) such as new or used cars.
“It is our team’s expectation that wholesale values will struggle going into the fall and early winter until a more lasting public health and economic recovery arrives,” Canadian Black Book stated in its most recent market analysis.
Last week also marked the announcement of Statistics Canada’s monthly labour force survey. As expected, there was good news in the numbers. The unemployment rate fell by 1.4%, from 12.3% to 10.9%. The new rate for July is nearly double the rate compared to January, illustrating the impact of the COVID-19 pandemic.
“The current downward trend in the unemployment numbers is very encouraging,” analysts at Canadian Black Book said. “In fact, many economists were predicting double-digit rates would be the rule for the year however, somewhat ahead of schedule the economy is already inching its way towards single digits. Employment in July increased by some 419,000 jobs, an increase of 2.4%. This was not as large a boost as the 953,000 or 5.8% increase for June but remains a very strong result.”
This past week, Scotiabank in their monthly Global Economics Auto News Flash reported that, in their opinion, a “solid rebound” is underway here in Canada.