Car sales, Turnpike traffic in steep decline

According to today's MaineBiz daily report, traffic on the Maine Turnpike was down 10 percent compared to the same weekend last summer, even though this year, the 4th of July holiday fell on Friday (it was on a Wednesday last year). So the ten percent decline came in spite of the fact that this was a three-day weekend, as opposed to last year's more typical two-day weekend.

The same daily report also mentions that fact that Maine car dealerships sold 17,759 cars during the first five months of 2008, a 9% decline compared to the same period last year. Maine also has four fewer car dealerships this year than we did last year.

These trends recall financial analyst Jeff Rubin's predictions for the CIBC investment bank. According to economic forecasts, Americans will be spending more on gasoline than they do on groceries by the beginning of 2010. Federal Highway Administration forecasts also indicate that the number of scrapped vehicles will begin to exceed the number of new vehicles sold beginning early next year. Rubin writes that "summing up the cumulative difference between new sales and scrappage over that period [between now and 2012] suggests that somewhere in the neighbourhood of ten million Americans will be coming off the road over the next 4 1/2 years."

Rubin's full report is fascinating reading: click here to read "Getting Off the Road: Adjusting to $7 per Gallon Gas in America," from CIBC World Markets Inc.'s StrategEcon newsletter.