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What Boosted Van Sales Have to Say about Small Business

By | 08.13.12

What Boosted Van Sales Have to Say about Small Business

Van sales were up nearly 32 percent in July compared to 2011, which translates to a greater increase in sales than every other vehicle type beside sports cars. So what does this particular industry growth indicator have to do with the state of small business in the United States? Interestingly, one unique way that business analysts track small business health is through the sale of vans. According to some experts, when it comes to van sales, over 90 percent are purchased by businesses. This is not surprising, considering that vans are used in a variety of applications, from tool transportation for tradesmen and contractors, to delivery vehicles for a wide range of distribution services (such as florists).

However, experts agree that there are other elements also influencing the increase in van sales, including pent-up demand (where small businesses can no longer put off replacing their fleet and/or finally have the means and the justification for making larger scale investments) and an expansion of financing options for small businesses overall (where businesses are seeing a much greater degree of access to funding than they have in years).

Nonetheless, in July 2012 nearly 26,000 vans were sold in the U.S., with only 20,000 being sold in July 2010 and less than 11,000 sold in July 2009, which was the first month of recovery from the recession. This sales trend reflects the National Federation of Independent Business’s small business optimism ratings. In fact, experts have tracked a major spike in van sales in December 2011, which clearly dovetails with an expiring tax break that boosted the NFIB Optimism Index during that month as well.

Other small business watch groups agree. Chad Moutray, Chief Economist at the National Association of Manufacturers, sees a direct correlation between the van indicator and overall increased confidence in the economy. Investments into large ticket items such as vans can be a strong indication that small business owners are beginning look forward to the future and seize important opportunities for expansion and growth.

References

Tozzi, John. “The Van Indicator Signals Recovery on Main Street.” Bloomberg Businessweek. 8/8/12. (8/10/12.) http://www.businessweek.com/articles/2012-08-07/the-van-indicator-signals-recovery-on-main-street.

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