VIDEO: A Look at the 2020 Automotive Finishing Market

Michael Guckes, a Products Finishing economic columnist, has some useful insight for finishers who rely on the automotive market for much of their shop’s work. Guckes recently sat down for a lengthy discussion on what he sees ahead for the automotive sector in 2020 and beyond.

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The video shares Guckes’ forecast and observations. Guckes’ takeways include:

• Shop size isn’t offering the business advantage today that most finishers believe it does. Large shops in the fourth quarter reported toughening business conditions as their smaller peers. Granted, the smaller peers did feel the bumps in the road first, Guckes says.
• Backlogs activity contracted sharply in the second half of 2019 and continue to face downward pressure. This is a one-two punch event with exports having been the first business metric  to start contracting in mid-2018. Domestic orders/economy helped prop up the market for over a year until 2H19. Now we are seeing some definite domestic orders weakness along with the ongoing weakness in exports. This slammed backlog levels which quickly eroded through the end of 2019.
• Aerospace and Medical continue to do well. Aero is growing more slowly now that it did at the start of the year. Surprisingly, medical business activity has been steadily accelerating this year. That’s pretty surprising and I bet many of Products Finishing readers don’t know that medical is expanding faster today than at the start of the year.  Lots of other end markets are sluggish.
• Material prices, prices received, business outlook: all of them are slowing down. Finishers are not able to push through price increases, but, at the same time, their input costs are also flattening out. Business optimism has fallen from where it was at the peak of the economic cycle. Nice to see a recent rebound, but no way to know if it will last.

also sat down for a recent webinar on the automotive industryAutomotive Design and ProductionGuckes and Gary Vasilash of , and discussed where the industry has been and what may be in store for the industry in 2020 in this free webinar.

Guckes is the chief economist and director of analytics for Gardner Intelligence, a division of Gardner Business Media and parent company of Products Finishing. He has performed economic analysis, modeling and forecasting work for nearly 20 years in a wide range of industries. Guckes received his bachelor’s degree in political science and economics from Kenyon College and his master’s degree from Ohio State University.

Read more of Guckes’ works at PFonline.com.