Among the interesting bits of news in the spring economic forecast released today by the University of Tennessee is this: Car shopping is hot.
Wow. Who would have thought car dealers would rescue the economy.
Taxable sales in Tennessee will see strong growth this year and auto “sales will be a major driver with fiscal year growth of 12.6 percent. On a calendar year basis, sales are expected to advance 4.8 percent in 2011. Automobile sales, along with purchases from manufacturers, will show the largest gains over 2010.,” says the spring 2011 Tennessee Business and Economic Outlook produced by the UT Center for Business and Economic Research.
Tennessee consumers are expected to keep buying cars in fiscal year 2011/12 “as purchasing moves closer to pre-recession levels of activity,” the report says.
Car sales are an important indicator of how consumers feel about the economy. When consumers are willing to add a car payment to the family budget, they must be feeling good about their prospects.
Considering that several long-time Knoxville area car dealers went out of business during the Great Recession, any sign that car sales are rebounding is good news.
The UT report also notes that the increase in auto sales and “Volkswagen’s new presence in the state have helped lift manufacturing jobs” in Tennessee.
VW began producing cars at its billion-dollar manufacturing plant in Chattanooga earlier this year. The plant has about 2,000 workers and is indirectly responsible for hundreds of other new jobs.
Here’s the complete UT report: Tennessee Business and Economic Outlook
Photo: The News Sentinel Auto Show at the Knoxville Convention Center on Saturday Feb. 26, 2011. (News Sentinel/ Amy Smotherman Burgess)