Just as this edition of AMD was going to press , the latest U . S . inflation rate figure ( the consumer price index published by the Bureau of Labor Statistics for June ) rose to an annualized rate of 9.1 percent . This was above economists ' 8.8 percent estimates , and while there is some credence in the argument that it doesn ' t reflect the ( at that stage ) recent falls in energy prices that have started to set in , and therefore may be an artificially high measure , it nonetheless marked the fastest rate of year-on-year increase in more than 40 years ( since 1981 in fact ). The data triggered further speculation that July might see the U . S . Federal Reserve stuffing another 0.75 percent ( maybe even a full 1.0 percent ) onto its benchmark interest rate , just as hopes had started to circulate on Wall Street that such a measure may no longer be needed , and that the rate of decline in share prices had therefore started to slow . Along with interest rates , inflation and jobs , share prices are that other great metric of the economic direction of travel in the leading so-called Anglo Saxon model economies . This all took place in a week that saw the euro drop to parity with the US Dollar for the first time since 2001 . In Europe , the effects of the war in Ukraine are that much ' closer to home ' and the volatility being seen in oil and gas pricing and supply has a direct umbilical cord to European exchange , interest and inflation rates . The United States saw over 370,000 jobs added in June , but the fear is that the present momentum will be fragile in the face of the headwinds that are increasingly likely . Even if not this year , most analysts are accepting that some degree of recession is now certain at some stage in 2024 . The Fed itself has acknowledged that unemployment in the U . S . will need to rise . Forecasts vary , but the present low level of 3.6 percent is expected to peak anywhere between 4 and 5 percent by the end of 2024 - the upper end of that range translating to significantly more job losses . The effects of this on the motorcycle industry could be threefold . Capital supply could continue to get tighter and more expensive , just as capital requirements are headed for all-time record highs and capital reserves are at an all-time low . Consumer confidence and demand are likely to soften , even if the ' R ' word is not yet to be invoked . While in-work rates are at recent highs , and out of work rates at historic lows , those who parrot that record vacancies are a sign of economic strength could not be more wrong . Since the dawn of economic time , all economies and all currencies have only ever been able to grow strongly in direct proportion to available labor supply . Low labor supply guarantees low growth , or even economic contraction . Fact . If consumer confidence is low , if the complex matrix of issues affecting labor supply , growth and job stability are soft , then demand is likely to soften even if the technical definitions of a recession are not met . That is ' stagflation ' - basically signalling a ' going nowhere ' economy . Third , supply chain issues are less likely to resolve themselves in less than vibrant and positive economic environments . I have read reports that the semiconductor issue is repairing itself sooner than expected , and that we may even be headed from famine to feast with a glut of additional supply becoming available - just
the effects could be threefold
as demand may be about to dampen anticipated ROI on the investments that have been made . However , the primary problem is that any short-term decline in demand is that it will turn up in the annual rings of future growth , and likely impact on our ability to be as ready as we should and could be for the carbon neutral and net carbon zero deadlines . Per the report on the recent decision by the European Union reported in this edition , those deadlines that are now starting to coalesce as being between 10 and , at most , 15 years ahead of us . In terms of the time needed to prepare for the undoubted positives that these could mean for the motorcycle industry , and the opportunities for deeper integration of PTWs into the global transport ecosystem , that is no time at all . While the United States may think that it is up to it to decide when or if it will implement a deadline , the global reach of supply chains , capital flows , product development cycles and returns on investment are such that if any one of the big three trading blocs ( USA , Europe or China ) adhered to such deadlines , it would make life very difficult ( and very expensive ) for the other two . If any two did so ( for which read Europe and a de facto abandonment of IC engines in China ), then like it or not , that would make it almost impossible for the United States not to have to ' get with the program '. That is proven by the fact that ' Detroit ' and California are the tail that wags the dog in American transport industry policy terms . If The People ' s Republics of Tamla Motown and The Beach Boys say jump , then if China and Europe are already headed to that ( maybe mythical ) paradise of zero carbon , then for the rest of America it is only a question of asking ' how high ?' I have always taken the view that regardless of what one thinks of the science , the principle of internal combustion engine ' end of life ' enforcement offends the purest principles of liberal values and personal freedoms . However , I have always taken the view that if that is where the next generation of profits are to be made , then preparation and adoption , for me , is a sacred tenet of good governance and that ' I am good ' with whatever is good for business . Whatever generates the profits necessary for there to be enough taxation to fund good defence , education , healthcare , housing , social care , lifestyles and retirement , then so be it . In the case of our aforementioned humble backwater , if it drives sales of a whole new generation of new shiny things , then I for one am not going to worry whether its hydrocarbons , wind power , solar or hydrogen - whichever solution wins out will be good for business . Build the product , make the sale , bank the money , enjoy life . See y ' all at Sturgis !
Robin Bradley
Co-owner / Editor-in-Chief robin @ dealer-world . com
4 AFTERMARKET MOTO DESIGN - AUGUST 2022 www . AMDchampionship . com