As economic indicators go, the pickup truck indicator is not a major one. We have not seen Fed chairman Ben Bernanke point to it and it doesn’t make headlines. But, according to Bespoke Investment Group, it is one reason to feel upbeat about the economy right now, even as various other economic data point to a slowdown.
“While traditional economic indicators get the most attention, a lot of economists like to look at sales of pick-up trucks as an indicator of strength in the small business sector,” Bespoke said on its blog. “The reason they focus on pickup truck sales is because small business owners tend to make up a large portion of the overall buyers of these types of vehicles.”
And the good news is that Ford is now selling a lot of pickups, or at least the F-Series truck. According to Bespoke, sales for 2012 are estimated at 618,000, which would mark the fourth straight annual increase and the highest number of sales since 2007.
It is a seductive case. It is interesting that pickup sales rose steadily through the 1990s, declining with the dot-com bust but then picking up again with a strong housing market.
Still, the pickup truck indicator has its problems. For one thing, it doesn’t look at market share: Ford sales could be rising at the expense of other truck-makers, which could mean that Ford itself is doing a lot better than small business owners.
For another thing, you have to wonder what all these small business owners are doing with their trucks. Could it be that many of them are folks who have given up looking for a job, given the sluggish pace of U.S. job creation, and have set out on their own? That doesn’t necessarily mean that these pickup truck drivers are thriving, or that small business owners are doing well.
Meanwhile, the increase in truck sales hasn’t been doing much for Ford’s share price. The stock traded at $9.83 (U.S.) in midday trading on Tuesday, down 25 per cent from its near-term high in January.