While parts of the Northeast are digging out from one last snowstorm of the season, Manheim’s Tom Webb chose to tie together gardening and how the industry is improving.
In the March Auto Industry Brief from Manheim Consulting, Webb explained many economic watchers will be looking at how warmer weather will help performance.
“Now that the weather has begun to thaw in many parts of the country, it is predictable that analysts will be pointing to every ‘green shoot’ as a harbinger of accelerating economic growth,” Webb said.
“We’re optimistic that the recovery can continue apace, but would be skeptical about any sign that promises a meaningful quickening in the rate of growth,” he continued. “Most green shoots prove to be weeds. They are quick growers – and, indeed, might even look nice after a harsh winter — but they are nothing to celebrate.”
Webb elaborated on his gardening analogies with a recommendation to policy makers who oversee how the economy functions.
“Those tending the economic garden would be wise to nourish that which is already growing, select plant seeds known to produce, and be patient,” Webb said.
“Our economic garden already has a horrendous weed (entitlement spending) that threatens to crowd out all else. It’s idealistic to think that large clump can be removed, but we should at least avoid watering it with indiscriminate stimulus,” he added.
Webb didn’t leave his economic garden discussion before touching on how the auto industry fits into the landscape that is the U.S. economy.
“Since the recovery’s beginning, the auto industry has been the fast-growing, hardiest and prettiest plant in the garden,” he said. “Even heavy winter snows failed to completely cover it.
“Our belief is that the auto industry recovery has nearly reached its mature height,” Webb went on to say. “We shouldn’t dump fertilizer (incentives) on it. It will only grow gangly and burn out.”