Canadian Personal Finance Blog

Archive for November 14th, 2007

New car sales are down in September? Could higher gas prices have something to do with that?

Sales of new motor vehicles declined in September, almost completely offsetting the gains made in August. Seasonally adjusted data from the New Motor Vehicle Sales Survey show that 140,263 new vehicles were sold in September. This represents a decrease of 2.1% from August.

Me, I bought a used car, just because I don’t need a new car, but I did need a good car.

Economy Resilient

Output and employment continued to expand steadily, unfazed by the late-summer turmoil in credit markets and the rapid ascent of the Canadian dollar.

The resiliency of the economy reflects a number of factors. While the turmoil in financial markets disrupted commercial paper in August, total short-term business credit grew steadily in August and September as borrowers switched to other instruments. The stock market recovered in September and October from small losses over the summer.

The Canadian economy is resilient, I can’t argue that, but I still am concerned about the ramifications of a strong Canadian dollar has not “passed through” the economy yet (in my opinion). I believe a bunch of manufacturers are “holding on” and hoping for the dollar to drop off so they can recover. Manufacturing may be OK, however, if their main market is NOT the U.S. (read China and Europe). We shall see in a year where the economy is.

Leading Indicators Up Too

The composite index rose 0.1% in October after a downward-revised gain of 0.3% in September. Of the 10 components, 6 increased, while 4 declined, the highest number of components to decline since October 2006. The weakness was concentrated in housing starts and new orders, which returned to more normal levels after exceptional gains in September. Growth was sustained by consumer spending and the financial sector.

This is interesting to me, as things seem to be slowing down, but not as much as I would have thought as well.