limaohio.com

Economic indicators: The pickup is picking up

May 4, 2013

LIMA — The pickup has picked up.



Sales of full-size pickup trucks are rebounding, driven mostly by customers who need the trucks for their work and are finally turning in old, high-mileage vehicles.



Locally, pickups are part of increased vehicles sales in the region, a piece of all good news for the first quarter economic indicators.



Auto sales in the region are making a strong comeback; consumers are buying more total vehicles and more used and new vehicles. In the first quarter this year, more than 11,000 vehicles were sold, including nearly 8,000 used vehicles. The 11,000 is an increase over 10,743 in the first quarter of 2012 and 10,217 in the first quarter of 2011.



Pickup buyers fall into two categories: people who want a truck and people who actually need a truck for its intended purpose. While gas prices are still largely keeping casual buyers away, trucks are selling to those who use them for work, said Joe Shaw, general sales manager for Lima Auto Mall.



“We’re definitely selling a lot of trucks,” Shaw said. “They haven’t been selling, but the fleet on the road is as old as it’s ever been. It’s nothing for us these days to take in on trade trucks with 260,000, 270,000 miles on them.”



General Motors is offering significant incentives, such as 0 percent financing and extra cash back, on new trucks now, Shaw said.



“They’re putting thousands of dollars on the hoods to get these trucks turned,” Shaw said. “If you need a truck, this is when you’re buying.”



New buyers include everyone from owners of construction companies to people who do home remodeling on the side to folks towing campers and boats.



Buyers are still interested in fuel economy, and companies are responding. GM is coming out with a V8 that offers the best fuel economy of any truck, Shaw said.



Ford’s F-150 has been the top-selling pickup truck in the country for the past 36 years. And now, more people are buying the model with the V6 Ecoboost engine than a standard V8; the engine gives the power and performance of a V8 with better gas mileage.



On May 2, The Wall Street Journal asked a question on its Driver’s Seat blog: Are pickup truck sales the best economic indicator out there?



Sales of large pickups rose 27 percent in April compared to a year ago, according to figures compiled by Autodata and published by The Wall Street Journal.



That’s the main takeaway from the April U.S. sales figures big auto makers reported today. Demand is surging for Ford, Chevy and Ram pickups — vehicles so tall and heavy that the six-cylinder 2013 Ram 1500's 25 miles per gallon estimated highway mileage is touted as leading the pack. (Sales of the redesigned 2013 Ram jumped 49 percent in April.)



The April U.S. vehicle sales are a sign that the housing recovery and comparatively stable oil prices are boosting other sectors of the economy, despite the choppiness in indicators such as corporate profits and manufacturing activity, the blog said.



Among other first quarter economic indicators:



• The regional housing market continues to improve. The number of homes sold in the first quarter held steady compared with the number in the first quarter a year ago, about 280. However, total sales and average cost of a house both increased. Also, the number of days on the market dropped, from 121 a year ago to 115 this quarter. That number has continued to drop from 2011, when it reached 140 days.



• County sales tax revenue collected is also trending up. For example, in Allen County, the sales tax received in the first quarter rose from $3.64 million in the first quarter of 2011 to $4.05 million in the first quarter of 2012 to $4.2 million this year. County sales tax received lags three months behind when it is collected, because the money is filtered through the state, so the revenue received in January, February and March was collected in October, November and December.



• The region’s unemployment rate continues to dip down as well. It was 9 percent in the first quarter of 2011 and 8 percent in the first quarter of 2012. This year, it was 7.5 percent in the first quarter.