**Guest Post**
Now might be the time to change as Mercedes has brought out a new S class.
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| Photo Credit – freedigitalphotos.net franky242 |
It is so fragile that perhaps it should be discussed in a whisper or maybe not at all, but it seems that the City believes that the economy may at last be sailing out of the doldrums and into a renewed period of growth and vigour. We have seen and heard it all before, of course.
It seems that ever since we first entered the global financial crisis of 2007-2008 economists and politicians have been telling us that it was due to end any time now. Sadly, those were the same economists and politicians who completely failed to spot that the crisis was about to happen, so perhaps a pinch of salt was a sensible precaution.
Why the newfound confidence?
The two largest purchases most consumers make are the house and the car. We have heard for years now about how flat the housing market is and how prices stubbornly refuse to rise as predictably as they did in the past. Certainly there are contributory factors here, with poor availability of mortgages stifling the market.
Undoubtedly, though, a lack of confidence contributed. The most fragile part of the market is that of first time buyers and, if they do not enter the market, the whole chain stops working. Fears over job security and wage stagnation or cuts make it much less likely that people will commit to their first house purchase. This makes it all the more significant that reports are showing a 45% increase in first time buyers from July 2012 to July 2013. This was the biggest rise since the economic crisis began in 2007.
Car sales are another important indicator and it is notable that sales across the EU have continued to fall for years now. A new car purchase is something that can be put off and simply holding on to your existing car for an extra year or two is an easy way to save a significant amount of cash. In the UK, however, new car sales have now been increasing for 18 consecutive months. Last month the Society for Motor Manufacturers and Traders (SMMT) announced that sales were up 15% on August 2012. So far in 2013, the rise reaches 16% when the year is taken as a whole. This continued and sizeable increase in sales is seen by economists as being significant.
The recovery elsewhere in industry
Surveys of manufacturing, construction and service industries are also showing positive news but these focus on questionnaires concerning the optimism of business owners and directors, rather than actual deals being done. The increases in house sales and car purchases, on the other hand, involves consumers parting with substantial sums of cold, hard cash and represents perhaps more concrete evidence of recovery. Some car companies are certainly backing the possibility of an upturn and Mercedes have brought out their new S Class motor in the luxury saloon sector. This represents a substantial investment for the Stuttgart firm and with large numbers being sold to senior business people, it shows confidence in the sector.
We have certainly been here before and there have been other false dawns. The accumulation of positive data, though, may just point to real growth at last.
