Motor vehicles and parts: some concerns..

In July new orders, seasonally adjusted orders for MVPs rose some 12.2% on the month and some 21% since January.  Quite hot, really, compared to the rest of the economy, but other data suggests that recent strength may not be supported going forward.

So let us look at the retail side of the equation:

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Annual sales increases are at very healthy levels, with perhaps only two other periods in the last 20 years having similar profiles.

But shorter term data is weaker:

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As is retail sales ex MVPs:

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And to put the boot in, inventory ratios are in dangerous territory:

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In fact they have really only been higher during the consumer boom years of the early noughties!

And if we look at the last few years, the current surge of inventories relative to slowing demand and overall economic weakness, suggests that one of the most important sectors of the economy could easily detract from growth going forward:

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