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Is the worst of the recession behind us?

Certainly the signals are mixed, but itís refreshing to see there is definitely more positive than negative economic news these days. Take last week, for example. Federal Reserve Chairman Ben Bernanke told the House Budget Committee that the pace of economic contraction was slowing. A strong confirmation of that came in the report that new jobless claims were the lowest in months.

Even more encouraging evidence comes from the National Association of Manufacturers. NAMís chief economist David Huether, said in his economic update: ďPositive news continues to mount. Of the†11 major economic indicators that came out last week, only one deteriorated. Home prices continued to decline. Outside of that, it appears that a smoother ride is shaping up for manufacturers and the rest of the economy going forward. It is very likely that the worst of the recession is now behind us.”

In other good news, while home prices continued downward, pending home sales in April posted the biggest monthly jump in nearly eight years! Thatís a good indication that home sales are coming back to life. The index was reportedly 3.2 percent†above last yearís levels, and itís the third consecutive monthly increase. Thereís more.

While the GM and Chrysler/Fiat soap operas drone on, and May new car sales were down 24 percent†from a year ago, Ford reported May was its best month for new car sales since last May. Moreover, optimistically looking ahead, Ford said it is planning to increase auto production by 42,000 vehicles a month in the third quarter.

NMMA President Thom Dammrich concurs that the news is more encouraging. He points out that itís important to understand our new boat sales arenít likely to see dramatic improvement until home sales and new car sales improve. Happily, weíre seeing some signs that both are improving.

Finally, last week the SBA announced a new dealer floorplan lending program that provides a 75 percent†SBA guarantee. NMMA, MRAA and NMBA all successfully pursued SBA in Washington to insure dealer floorplan financing was included in the new SBA loan program. This should make floorplan financing much more attractive to local bank. That, in turn, would be a huge positive for many dealers and, by extension, their manufacturers.†

Overall, then, this past week or so has been positively highlighted by increased sales in the housing market, improving consumer confidence, lower initial unemployment claims, increasing new orders for durable goods and a new SBA loan guarantee program, all noteworthy and heartening. They certainly lend credibility to those who predict weíll see marked economic improvement in the second half of this year.

Comments

6 comments on “Is the worst of the recession behind us?

  1. arch

    We have a LONG, HARD, and BUMPY road ahead of us. There are still other shoes to drop before this thing is all over. WE are spending our way out of this mess, which was caused by overspending. What you are seeing now is a FALSE POSITIVE. I hate to burst the optimists bubble, but it’s the truth.

  2. LARRY RODRIGUEZ

    I HAVE TO SOMEWHAT AGREE WITH ARCH, THOUGH I SEE NORM’S PERSPECTIVE, AND ALLOW ME TO EXPLAIN;
    AN OLD MATH TEACHER OF MINE,(a long time ago!) EXPLAINING WHY THE STUDY OF FRACTIONS WAS USEFUL, USED TO SAY, “WHEN YOU FIND YOURSELF AT ZERO FRACTIONS BECOME EXTREMELY IMPORTANT”.
    YES WE ARE STILL IN FLAT LAND, (we hope), “THE LONG AND WINDING ROAD” IS AHEAD FOR SURE, IN THE MEANTIME I CAN SEE NORM’S VISIONS, ANY POSITIVES, EVEN IF THEY ARE “FRACTIONS” SHOULD BE EXAMINED AS POSITIVES, THOUGH ON THE SURFACE THEY MAY APPEAR AS FALSE ONES.
    LETS FACE IT, THE INDUSTRY CAN WELCOME ANYTHING ABOVE WHERE WE ARE, EVEN IF THE LIGHT AT THE END OF THE TUNNEL IS JUST A CANDLE FOR NOW!

  3. Carl M

    Bernacke & his predesor Paulson, as well as Barny Frank,Chris Dodd & Rangold should be in jail for crimes agianst America.
    I just got a call from my banker who talked to the SBA this morning. SBA said they have been overwhelmed with calls but really can’t help anyone because the program is designed for already approved SBA lenders (G E is not) who have existing floorplan with a dealer — basically to insure and create additional floorplan for new inventory for dealers they are already doing business with.
    At this time he sees no potential for any assistance through the program announced.
    Has Dammrich bought a boat yet? Now’s the time to get a great price on a new 2007.
    Could the feds give Genmar to Seesa Marine? Like the Chrysler Fiat deal.
    I believe we will see marked inprovement in the second half of the year. I just don’t know what year??

  4. AnonymousBob

    Carl M:

    Don’t forget that Paulson’s boss was George W. Bush. We can’t blame this mess entirely on one party as they were ALL in this game together. There are checks and balances available that could have mitigated this mess – if only any of them had the cojones to actually confront the issue instead of accepting all the lobbyist $$.

    That is an interesting, and unfortunate, bit of news about the SBA. The news doesn’t seem to be widespread, otherwise we’re going to see more dealers and OEM’s tumble into the brink. Let’s hope there was some miscommunication between the SBA and your banker. Let’s hope!!

  5. Carl M

    A….Bob you are correct that is why Paulson is on the list and other Republicans should be aswell. Bush wanted war funding & gave the socialist what they wanted in exchange, which to them wasn’t enough, now they are getting more of what they want & it’s still not all they want comrade.
    The SBA threw boat dealers into the mix at the last minute knowing no dealers could qualify to placate NMMA lobbiests who were late to the dance as the bill was already written by the car guys. FYI: $500k is the minimum floorplan & you have to prove you have been profitable & never late on payments over the last 3 years. How many boat dealers made A profit last year??
    Agian a feel good sound bite that has no teeth & no possibility of helping. I really wish it would have & now I must concur with you that more dealers & builders will vanish. Hope is what Obummer sold last fall. That fruit is rotting on the tree..

    Another thing to be aware of: The cash for clunker cars program now being voted on in congress is a page out of the European socialist handbook. They have to buy new cars every 8-10 years or they pay extreme yearly registration fees (tax) after the car reaches 10 years old. If you trade it in at 8 years the gov’t subsidises $3,000 euros toward new European made car. The reasoning their politians told them this was nessary: cleaner/greener, smaller more efficent cars, and it will keep Euro car factories (jobs) busy.
    It will not be coming to the boating industry.

  6. dave boso

    Hey guys forget about any ressesion it will pass like they all have.
    What you and I need to be worried about is the goverment taking control of our busuness. They have the cars, and now tobacco, how long before us,? It has already started ; the proposed 15% ethonol in fuel will doom the rec. boat business, we have to stop this from happining. I have drawn up a couple hand outs about ethonol in order to inform my customers about this travistery by our congress complete with the names and phone numbers of the people they need to call, please all of you do the same thing we need numbers, and to get the word spread.
    I know this is not a political site but it is a boating site and boating is in danger.
    We are considered by this bunch in Washington as the rich, and they hate the rich. so we need to act now and often. get on board and stop this now.

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