Pub. 12 2013-2014 Issue 4

N e w J e r s e y C o a l i t i o n O f A u t o m o t i v e R e t a i l e r s W I N T E R 2 0 1 4 16 new jersey auto retailer It has been one of the coldest winters on record over much of the United States. The record low temperatures froze, not only the countryside, but economic growth and retail automotive sales, aswell. It iscritical toacknowledge that the last couple of months have been unusual and that the impact to the economy andmotor vehicle sales is temporary. The economy remains fundamentally strong and, as we all look to spring and an end to the bitter cold, we can see a much more stable and stronger 2014 developing. Economic growth since 2009 has been uneven. TheU.S. has gone fromstrong stable quarters to lackluster demandandback again. 2013 was no exception to this roller coaster ride. Indeed, Growth Domestic Product (GDP) growthof 1.9%wouldnot, typically, be considered great. The growth the year needs to be considered in light of the transition that has been the backdrop to economic activity since 2009.Debt recoveries,wherehouseholds and individuals have to pay off money owed, are historically slow recoveries. Debt simply takes time to pay down. In addition to paying off debt, the economy has been dealing with a large overhang of housing, built during the massive expansion of mortgage credit.When considering these factors, 2013 appears not as another year of dour economic growth, but rather as a marked transition to faster and more solid growth. Growth in 2014 is expected to build, quite literally, on the improvements of 2013, with growth increasing steadily in housing, employment, and motor vehicle sales as the year progresses. Housing has remained the largest drag on economic activity, in spite of record low interest rates. Manufacturing, particularly automotive manufacturing, has recovered, but construction, sales, and even home values have trailed economic growth. As we move into 2014, this is expected to Coming out of the Deep Freeze