Auto sales drive economic growth

Auto sales drive economic growth

The U.S. auto industry’s comeback contributed [I]fully half[/I] of the 2.2 percent national economic growth in the first quarter of this year, according to Chad Moutray, chief economist of the National Association of Manufacturers. New auto sales are on target to top 14 million in the U.S. this year, the best pace in four years.

Moutray estimates that every dollar spent on a new vehicle leads to an additional $2.02 in economic activity. The industry’s share of gross domestic product for the quarter was 2.8 percent, which is nearly as high as it was in 2007 before the Great Recession, according to the report.

Moutrays findings were echoed by GM chairman and chief executive officer Dan Akerson at graduation ceremonies at Columbia Universitys business school. The auto industry has gone from being an anchor on the economy to being the wind in its sails in fact, were one of the few bright spots, said Akerson. Were adding jobs and investing in America, just as America invested in us.

Akerson said the auto industry now accounts for 1 in 17 private-sector jobs and those jobs create $500 billion total compensation annually. They generate $70 billion in personal tax revenues annually, which represent 3.0 to 3.5% of this countrys gross domestic product. In addition, 47 different states have at least 10,000 auto-related jobs, and in 20 states that jumps to 100,000 or more, he said.

Thats why this industry is so important. And thats why two different administrations saw it as worth saving, said Akerson, alluding to the U.S. bailout of his company in 2009.