@Risk

Yesterday, SupplierBusiness released its Automotive Confidence Index, which regularly takes the temperature of the industry from the front line, ahead of other sales and performance statistics.

Taken each quarter, the index covers four key areas:

• new orders
• inventories of finished products
• overall inventories
• employment levels

This latest index, representing the three-month period from May to July, shows encouraging signs of confidence returning to the industry. For instance, even though the number of suppliers reporting declining orders hasn’t changed, the number of new orders increased –particularly in Europe, where there was a 13.8 point rise. That trend even held in North America, where new orders increased 3.9 points.

In addition, employment levels are on the upswing.  Back in April, employment levels were falling at over 60% of suppliers. Since then, these levels have stabilized, and an increasing number of suppliers are now seeing employment levels grow.

Does this data represent nothing more than a temporary boost from Cash for Clunkers and other incentive programs, or are we starting to see signs of a true recovery? The August-October index results will be telling.