Canadian wholesale prices remained stable this past week and have been for a month, according to Canadian Black Book’s latest COVID-19 update.
Small declines in value were seen in the car segment (by 0.03%) and the truck segment (0.03%) for the second consecutive week. CBB said the weekly variation is “quite small” compared to what they typically see this time of year, as prices generally decline.
In comparison, U.S. wholesale used vehicle prices were down for both segments, but more significantly: car wholesale prices declined 0.74% while trucks declined 0.39%.
The average days to turn for a used vehicle listed for sale is now higher than it was a week earlier, reaching a 14-day moving average of 46 days. The days to turn have typically been trending lower since June, according to CBB.
As for business and consumer confidence, the Bank of Canada released the result of its outlook study last week and found that business sentiment in Canada has improved but remains near all-time lows.
“This is primarily due to great uncertainty as to how the virus will impact demand for goods and services. Businesses responding to the survey shared that they feel their sales prospects are limited by much weaker demand and by precautionary health guidelines,” said CBB. “Currently their investment and hiring plans remain conservative, due to the high level of economic uncertainty.”
The Bank of Canada is forecasting a long and difficult path to a full economic recovery, although it has so far rebounded more swiftly than anticipated since COVID-19 restrictive measures were lifted this summer. The second phase of the recovery, known as the “recuperation phase,” is expected to be uneven and protracted, said CBB in referencing the Bank of Canada.
Unsurprisingly, consumer confidence was down this past week thanks to re-applied restrictions on businesses and social gatherings — particularly in Ontario and Quebec, the last of which has renewed its 28-day restrictions amid a second wave of the virus.
“The Bloomberg-Nanos Canadian Confidence Index dropped more than half a point to 51.9,” said CBB. “This is the third-straight decline reported in the weekly index, which brings it to the lowest level since mid-August.
Also an issue for both dealers and consumers is the lack of vehicles. CBB said restriction in supply is a key factor keeping used vehicle wholesale prices high.
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