In my most recent TrendsTalk, I mentioned that we were having to "outdrive our headlights" in March.
What does that mean? It means that the usual leading indicators – the high beams that allow companies to see the twists, bumps, and holes ahead – were giving an incomplete picture. Data sources were releasing, at latest, February figures. The black swans had not yet manifested in the data.
They have now.
As of April, many of our traditional data points and analytical anchors are "coming back on line," so to speak. They are giving us an early assessment of the economic damage we are sustaining as a result of COVID-19, unprecedented "stay-at-home" orders, mandatory business shutdowns, and crashing, unprofitable oil pricing.
Let's consider a couple of key data points that we have received in the first few days of April:
- The US ISM PMI (Purchasing Managers Index) 1/12 dipped down in March but is above the August 2019 low, showing some resiliency to early operational disruptions for US manufacturers. However, steep decline in Oil Prices and growing ramifications of COVID-19 are expected to impact manufacturing. ITR will be closely monitoring this Index 1/12 for further decline.
- Automotive Retail Sales plummeted in March, falling 26.4% from the February level. This was not only the most severe February-to-March decline on record but just the second time ever that Automotive Sales posted a decline from February to March. The only other time was in 1945 (WWII). This confirms what we all suspected, that the automotive industry is under extreme and unprecedented duress as a result of these black swan events.
These fresh data points (and thousands more to come as April wears on) are the high beams that will allow us to gain a firmer analytical grasp of the situation and illuminate the path forward. Just as they aid us in our forecasting process for our clients, they can be a crucial ingredient in your own business’s planning process, helping you wade into 2020’s uncertain waters with confidence. Stay up to date with us as more data points roll in.