AKRON (Jan. 20, 2015) — As we plunge headlong into 2015, most of the economic news we're hearing is positive.
Which, of course, leads to the question: “What's the catch?”
Unemployment continues to fall, new car sales are poised to break the 17 million-unit ceiling, Wall Street has been clicking along on all cylinders, capital spending by business, government and non-profits is rising and small business owners appear to be gearing up to take part. Add to that the fact that plunging oil/gasoline prices have put more money in consumers' pockets.
According to the latest Small Business Optimism Survey, conducted by the National Federation of Small Business (NFIB), the small business “optimism index” is at its highest point in nearly eight years. This, the organization surmises, is a “strong signal that American small businesses could be finally shaking off the effects of the Great Recession.”
“This could be a breakout for small business,” said NFIB Chief Economist Bill Dunkelberg. “There's no question that small business owners are feeling better about the economy. If they continue to feel that way, 2015 could be a very good year.”
In the NFIB's latest survey—based on polling done in December—respondents gave positive responses to eight of the 10 indices, with strong indications in capital spending, hiring, expansion and inventory growth.
This report augers well when taken together with recent statements from the Specialty Equipment Market Association (SEMA) and Auto Care Association (ACA) heads, both of whom said their constituencies experienced growth in 2014 and that they anticipate continued good fortunes in 2015.
SEMA President Chris Kersting went so far as to say he expects 2015 to be the latest in a string of banner years for the automotive aftermarket, while ACA President and CEO Kathleen Schmatz said 2014 was arguably the association's best year in its history, which sets the stage for a bright 2015.
Similarly, the Small Business Administration noted recently that small business is responsible for roughly two-thirds to three-fourths of U.S. job growth recently. In 2014, small businesses created nearly 2 million of the roughly 3 million private-sector jobs generated.
The one soft spot? The consumer tire aftermarket.
The most recent Rubber Manufacturers Association's forecast for aftermarket passenger tire shipments this year is for a slight decline from the 205 million units shipped in 2014. Light truck tires will fare slightly better, edging up marginally over the 29.6 million units shipped last year.
Part of the low expectations for 2015 can be traced to the assumption that tire prices are going to rise because of the countervailing and/or antidumping duties on Chinese-sourced tires.
It seems the industry's been banking on “pent-up” demand for years. One has to wonder now if that's supposed to be “penned-up” demand and who has the key to unlock the pen.
This editorial appears in the Jan. 19 print edition of Tire Business. Have an opinion on it? Send your comments — or a letter to the editor — to [email protected].