Vehicle Sales – Cars & Trucks are a depleting asset that must eventually be replaced. The age of the existing fleet of cars is the oldest in many years and replacement means continued growth from the auto manufacturers which represent a major component of the economy.
Construction of Structures – When this graph starts in 1990, the U.S. population was 250 million while today we are at 320 million a full 70 million additional people or potentially 35 million new housing units. An increasing population eventually needs housing and thus, our housing stock must likewise grow which as the red component of the graph above. This continued pent up housing demand will one day feed back into the economy.
Future Growth – If we get back to the 13% GDP component from these two industries, then we can see 2 1/2% increase over let’s say fife years. Divide that out over a five year period gives an added 1/2% of GDP growth per year. Good for earnings and an upbeat forecasts!