The pickup truck indicator shows the economy is strong

The pickup truck indicator shows the economy is strong

According to one unconventional economic indicator, business is booming.

Looking at sales from pickup trucks as a proxy for the health of small businesses in the U.S., DataTrek Research found that 2019 ended on a strong note, and that sales show “little sign of turning lower as we start the new decade.”

The firm says this data gives a read on the economy since it encapsulates everyone from an “oil field service company” to the “local arborist,” and is typically a discretionary purchase.

“Purchasing a new vehicle is entirely discretionary; they can always fix the old one and keep it running another year if they are worried about business conditions,” Nicholas Colas, co-founder of DataTrek Research said.

The firm has been analyzing sales data since the 1990s, which includes some of America’s most popular cars like the Ford F-Series, Dodge Ram and Chevy Silverado. These trucks are primarily bought for businesses, rather than for individual uses, the firm said.

Overall, 2019 sales reached $72 billion, or 2.4 million units, which was 2.3% higher than 2018’s numbers. There was a slight slowdown in year-over-year December sales, but the firm said it was because Chevrolet is ramping up its 2020 Silverado, and a slowdown in sales ahead of a launch is customary. Sales in October and November, however, were good.

Colas said that “small business confidence was pretty stable all year,” and finished the year on a high-note, which is a ” good starting point for 2020.”

This is in keeping with the trend of the last 4 years, which has shown resilient pickup truck sales, despite some saying a pullback is coming.

– CNBC’s Nate Rattner contributed to this report.

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