Could the slowing auto industry prompt the next recession?

September 17, 2019 - 4:00 am
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Kansas City, MO - When looking for signs of a recession, many experts might look to the housing market, but Charlie Chesborough, Senior Economist with Cox Automotive, says this time, it might start with the automotive industry. There's several factors, including the GM strike, the attacks in the Middle East, and possible aggressive trade policies. Chesborough says the cities where vehicles are made would feel it first. 

"The lay-offs at factories, things like that, would generally impact local economies before it becomes a bigger issue," says Chesborough. 

In regards to those tariffs everyone keeps talking about, Chesborough says they wouldn't make as much of an impact as you might think. He says vehicles have 30,000 parts coming from all parts of the world. "That makes the supply train very intricate and interrelated. The president's tariffs are likely to effect every vehicle somehow, but more on a smaller scale," according to Chesborough.    

He warns, with the slowing industry, we may see credit start to tighten. That would limit the amount of buyers able to be approved for car loans.

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