There was a greater variance in auto sales across the Federal Reserve Bank’s 12 districts in the Nov. 28 Beige Book than there was in the Oct. 10 report. Despite the Fed’s district-wide economic report indicating a moderate increase in economic activity in seven of its districts, New York and Philadelphia saw weaker conditions stemming from Hurricane Sandy.
Retail sales in New York took a hit because of the superstorm, but sales are expected to be made up in the coming weeks. Car dealerships in upstate New York had a flattening of sales in October, though used-vehicle sales were “fairly robust.”
The outlook in the Philadelphia region was less optimistic than in the previous Beige Book, with uncertainty stemming from Sandy recovery efforts and the looming fiscal cliff. Dealerships, however, are among those who remain positive as recovery spending continues.
As sales in the district, which also includes hard-hit New Jersey, fell off in the weeks following Sandy, bumps in November and subsequent months are expected as insurance companies cut claim checks for approximately 30,000 cars damaged in the Garden State. East Coast dealerships will also see tighter new-car inventories following Sandy’s irreparable damage to an estimated 15,000 new vehicles awaiting shipment at the Port Newark-Elizabeth Marine Terminal in northern New Jersey.
Though lower than earlier reports this year, dealers in the Atlanta district reported steady growth in sales, stemming from low interest rates, available credit, older cars and the popularity of new fuel-efficient models. In Chicago, retail auto sales dropped, partly due to incentives geared more toward leasing.
St. Louis vehicle sales rose over previous 2012 levels, with 50% of car dealers reporting increases. Sales outlooks through December were mostly positive, with 64% of dealers expecting to see increases beyond 2011 levels. Amid a generally unchanged demand for consumer loans, a third of the banks reported a relatively solid need for car loans.
There was a strengthening in auto sales in Cleveland, St. Louis, Minneapolis, and San Francisco. The latter saw a continued strengthening of new- and used-car sales, well above this time last year, and a further gain at yearend is anticipated. Consumer lending in the district also rose, with auto loans a primary factor.
The Fed will release the next Beige Book in early January.