One current challenge is to agree what is economic growth. On the one hand it may be an improvement in GDP; or a growth in employment or a range of other indicators. However, the problem with macroeconomic issues is that such small changes as have been witnessed recently may require later adjustment as more data becomes available. Growth may be in the eye of the beholder, especially if the numbers are small – is that the current situation?

The level of change in the UK economy is largely at the behest of the European economy and, if one looks at the current state, it’s not very good at all. Eurozone ministers have had almost as many summits in the last couple of years as there are in the Alps, and there is no sign of the frequency declining. However, there are the smallest positive signs emerging that an acceptance of the need for a properly monitored and sanctioned common monetary policy might be coming. Without such a policy, realistically there is little hope for a sustainable euro.

Elsewhere, recent figures for new car sales in the EU have shown a further drastic drop in the numbers. Further down the line, what might be the impact for the United Kingdom car market? It has been suggested by some commentators that eurozone vehicle manufacturers might seek to take advantage of the stirling;euro relationship and export significant numbers of new cars to the United Kingdom at extremely competitive prices in an attempt to boost European sales in the last quarter.

The United Kingdom economic indicators have been marginally less bad for the last couple of months. The challenge is ‘how sustainable are those signs of possible recovery?’ The cynic might claim that release of Olympic sales into the economy is a red herring; equally, elsewhere we are seeing escalations i food prices with the expectation of further rises due to poor grain crops in central Europe and North America. Energy prices too are rising and, although raw material prices may have settled due to a plateauing of demand in China and India, the latter may be important for sustainable growth.

While the United States presidential election is not that far off, any change may well put economic change on hold for several months while a continuation of Obama in power could cause equal problems through a political impasse between a Democratic president and a Republican congress. Many would claim US politics is only about the domestic situation.

To return to the United Kingdom situation and sustainable growth and particularly within the automotive sector there are a number of ongoing changes which justify comment.

A downturn in new car sales post 2007 has meant that as many as two million new cars have not been sold. The immediate result is that the used car market has been starved of a steady stream of younger used car which, in turn means the cars that have been coming to market have attracted enhanced prices at auction which, in turn works right through the market.

Higher used car prices may be a pain for private used car buyers but there could be benefits in terms of lower total cost of operation in that depreciation may be lower across the cars’ replacement cycles. That in turn could offer forward looking leasing companies the opportunity to trim monthly charges in the expectation of better residual values.

A further impact on the market and therefore the economy is the dramatic way in which LCV sales have dropped post banking crisis. Given that the bulk of new LCVs are acquired by major operators at highly aggressive prices and then replaced relatively quickly, so supplying the used LCV market and enabling SMEs to acquire used vehicles. A serious and sustained shortage of used LCVs could even be detrimental to economic recovery if that recovery is to be driven by SMEs.

In summary, sustainable economic recovery is elusive and complex. While there is a tendency to look for morsels of good news, it is important to seek a balance of good and bad rather than simply cherrypicking data to justify a viewpoint.