US light-vehicle sales may rise slightly to a new record in 2016 and remain strong after that, IHS Markit said today as part of an industry forecast.
“The other word you can use to describe it is healthy,” Chris Hopson, manager of the company’s North American forecast, said during a webinar presentation. Sales above 17 million annually, he said, “is a sustainable level.”
The record was set last year at 17.47 million, according to Autodata Corp., which compiles auto sales data. Light-vehicle deliveries for this year totaled 15.86 million through November, 0.1% higher than the first 11 months of 2015.
IHS Markit said a strong December could boost 2016 to a new record. The forecasting and analysis company said it expects light-vehicle deliveries to dip slightly in 2017 to 17.37 million. However, it forecasts that an improving economy will raise sales to 17.57 million in 2018 and 17.56 million in 2019.
Consumers are “continuing to buy in an auto environment that’s still welcoming,” Hopson said. While the Federal Reserve has started to raise interest rates, he said, “we’re bumping up from historically low interest rates.”
US vehicle sales have bolstered the auto industry, making it one of the strongest performers in manufacturing. Deliveries haven’t been strong across the board, though. Light trucks surged 7% in the first 11 months while cars plunged 8.4%, according to Autodata.
The consulting company estimates the North American auto industry had inventory of 3.98 million units, or a 72-day supply. Traditionally, a 60-day supply has been considered ideal.
IHS Markit also forecast that the US gross domestic product, the total value of goods and services produced, will expand by 2.3% in 2017 and 2.6% in 2018, up from a 1.6% percent gain this year. Effects of policy changes made by the administration of President-elect Donald Trump won’t be felt until 2018, IHS Markit said.
The company also forecast that the price of Dated Brent crude oil will rise to $54 a barrel next year and $57 in 2018 from $44 a barrel this year.
Low oil prices have hurt manufacturing sectors that supplied machinery for oil and gas exploration.