The Federal Reserve Board reported this week that its industrial production index climbed 2.2 percent in 2012. That represents a slowing of the growth rate from 2010 and 2011, but still left the index slightly above the 2006 average.
That index peaked in December 2007, just as the recession began, and remains below that peak. There have been only two periods since 1921 in which it took longer for production to recover fully. One, lasting just over six years, came after production peaked during World War II. The other, lasting more than seven years, came during the Great Depression.
The accompanying charts show the trends in the two indicators in the largest developed countries. The constant, if slow, increases shown in the United States since the economy hit bottom in 2009 have not been matched in any of the other countries. German industrial production is above where it was in 2006, but has been declining for more than a year.
In much of Europe, the idea that there has been a recovery at all seems doubtful. Car sales did spike higher in 2009, but that was largely because of temporary government-financed incentives that provided money to buyers who traded in older cars for new, presumably more fuel-efficient vehicles.
Britain also announced a tax increase that could be avoided if car buyers acted quickly, and many did. Sales fell off sharply in most of Europe after the incentives expired, and have continued to decline.
New-car sales can be a particularly sensitive economic indicator because few people really need to buy a new car, and thus tend not to do so when they feel uncertain about their economic prospects. Even if a car purchase can no longer be delayed, a used car is an alternative.
The charts show car sales over 12-month periods, compared with the figures in each country for 2006. They exclude light truck sales, a category that includes sport utility vehicles and minivans. Such vehicles are normally included in the United States when counting car sales but excluded in other countries, where they are more likely to be used by businesses than families.
In 2012, car sales in the United States were 7 percent below the level of 2006. Sales in Japan had recovered to within 6 percent of the 2006 total. But in most European countries, sales are well below precrisis levels and are continuing to fall.
A couple of years ago, the periphery of the euro zone appeared to be in a recession, but the core countries of the zone seemed to be doing relatively well. That has changed, and not because the periphery has improved.
Germany reported this week that its economy declined in the final quarter of 2012, and France also seems to be in decline. But in neither of those countries have car sales and industrial production plunged as rapidly as they have in Italy and Spain. Spain’s car sales are now less than half the level of six years ago.
Article source: http://www.nytimes.com/2013/01/19/business/economy/car-sales-continue-to-fall-in-many-developed-countries.html?partner=rss&emc=rss