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Weekly Industry Crib Sheet: Electric Vehicle Sales to Surge through 2020

Plus: Factory Orders Remain Stable in November, Unemployment Rate Remains Unchanged, Consumer Confidence Falls, and Manufacturers Voice Disappointment at Lapsed Tariff Bill.
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Factory Orders Steady in November

New orders for United States manufactured goods were relatively unchanged in November, following a 0.8 percent increase in October, as lower demand for non-durable goods mostly negated the modest gains in other categories, according to the U.S. Department of Commerce. The value of new orders inched up $0.2 billion to a total of $477.6 billion for the month. Excluding the often volatile transportation, new orders rose 0.2 percent.

Demand for manufactured durable goods increased 0.8 percent to $220.9 billion, the sixth gain in the last seven months. Machinery orders, up for three consecutive months, posted the largest increase, climbing 3 percent to $31.9 billion. Meanwhile, primary metals orders rose 2.5 percent to $29.4 billion and electrical equipment orders increased 1.6 percent to $10.1 billion. However, much of these gains were offset by a 0.6 percent decline in demand for non-durable goods.

“Manufacturing, the pillar of the recovery from the 2007-09 recession, has lost momentum in recent months as fears of the ‘fiscal cliff’ and slowing global demand slammed the economy,” Reuters reports. “However, there was little sign in the factory report that worries over planned austerity measures were leading businesses to cut back on investment plans.”

On a more positive note, orders for core capital goods (excluding aircraft and defense equipment), which serve as an indicator of future business investment, rose 2.6 percent in November after rising 3 percent in October, suggesting companies may be more willing to spend in 2013.

“Sustained gains in employment offer additional evidence that companies are willing to invest and expand as global growth stabilizes and American consumers keep spending on goods such as automobiles even as lawmakers battled over the budget in late 2012,” Bloomberg News explains. “Further pickup in production may depend on a stronger rebound in the global economy and a boost in exports.”

Electric Vehicles Sales to Hit Nearly 4 Million a Year

While electric vehicle sales fell short of automakers’ expectations last year, new forecasts project a stronger market through the rest of the decade, with global sales reaching 3.8 million units a year by 2020.

Electric vehicle sales are expected to grow at a compound annual rate of nearly 40 percent through the remainder of the decade due to competitive pricing and rising demand for alternatives to internal combustion engines at a time when fuel prices are high, whereas the auto market will expand by 2 percent a year, according to a report by Pike Research.
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