N. America Auto Supply Base Maintains Positive Mindset, But Confidence in Europe Fluctuates

London — December 1, 2010 — A recent survey of the automotive supply base suggest industry growth is ongoing in both Europe and North America. But while confidence remains strong in North America compared to the last quarter, confidence among European suppliers has taken a hit, suggesting that the rate of growth in Europe slowed during that period, according to the latest IHS survey of the industry.

The IHS Automotive Supplier Confidence Index is a quarterly measure of how automotive suppliers are faring based on four key areas of activity — production volumes, new orders, inventories and employment levels.

In the two years that the Confidence Index has been measured, it has charted the recovery from the global recession and fall off in orders that occurred in late 2008 through early 2009, and the increasing confidence regarding expansion amongst suppliers that has lead to the recent year-on-year profit margins and increases to year-end profit predictions. The fall in European suppliers' confidence from the previous quarter suggests that they are finding conditions a little tougher now.

A breakdown of the European key metrics in the overall Confidence Index reveals that new orders and inventory growth are much less strong than the previous quarter. The fall off in employment levels implies that suppliers are no longer hiring new employees at the rate they were in the summer. Confidence in production volume growth has taken a small hit compared to the last month, but has fallen greatly from the high of January 2010.

By comparison with European suppliers, where individual elements have fallen from the high levels of spring/summer 2010, North America suppliers expect growth to continue. Though all key metrics appear to have stagnated, they all score well above 50, with production volumes, new orders and employment levels each scoring above 70, implying rapid growth is still occurring.

Along with this, inventory levels are steadily rising, but tracking below other elements in terms of growth. A potential reason for this is that inventories are being kept under control.

IHS Automotive brings together the analytic and research capacity of CSM Worldwide and IHS Global Insight's automotive group, and it provides superior-quality information, analysis, forecasts, and advisory services to organizations involved with the automotive industry.

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