As a new year began this week, Scotiabank reported its sales predictions for 2014.

Expected to break a record this year, Scotiabank predicts new-car purchases in Canada will edge up to 1.76 million units in 2014, surpassing 2013’s peak of 1.75 million.

"Purchases in Canada are expected to edge up to a record 1.76 million units in 2014, with volumes boosted by an improving labor market and the best vehicle affordability in more than three decades," said Carlos Gomes, Scotiabank's senior economist and auto industry specialist. "Volumes in Western Europe began to stabilize in the second half of 2013 and are forecast to increase next year for the first time since 2009, helping to lift global car sales to record highs.

Perhaps a result of improving vehicle affordability, Canadian househoulds now spend only 4.3 percent of their disposable income on purchasing new vehicles, down from 5.8 percent a decade ago during the previous sales peak, Scotiabank reported.

Offering a larger outlook, the company also shared in its latest Global Auto Report that that overall cyclical recovery in global auto sales that began in mid-20009 “remains intact.”

According to the report, Scotiabank is predicting 72.20 million new-car sales globally in 2014.

Even Western Europe  — which saw volumes stabilize in late 2013 after falling to the lowest level in two decades earlier in the year — is expected to see an increase in sales next year, according to the report.

Scotiabank says this increase in Western Europe will “help lift global car sales 5 percent to record highs”

“We expect next year to be the first synchronized expansion in global purchases since 2005,” Gomes added.

Scotiabank explained the expected sales volume increases will be spurred by strengthening employment growth, rising consumer confidence and ongoing low short-term interest rates.

The financial market will also play a positive role, as the the Bank of Canada recently indicated that systemic risk is at the lowest level in two years.

With all these factors in mind, Scotiabank said its leading indicator of global car sales recently climbed to the highest level in a decade.

To view the whole report, see here.