It was always obvious that the revised forecasts for global growth and major market financial performances for 2022 and 2023 that were issued in April would, themselves, need to be revised further down, and that is indeed what has happened.
The January forecasts were revised down in April, the April forecasts were revised further down in July. In all probability those forecasts will also be missed, but for now we have to assume that can at least see some kind of picture emerging.
Last month I discussed whether "relative net growth" was the best that we in the motorcycle industry could hope for this year and into 2023. That is to say that new PTW registration data flat or even softening by low single digits may actually be a relatively good 'result' for a market that is just as vulnerable to declining incomes and collapsing consumer confidence as any other 'discretionary' spend-dependent sector.
This despite the ever-growing acceptance of the increasingly compelling arguments (gas mileage, environmental concerns, urban mobility etc) that appear to make for PTW market stability and even growth when times get hard.
Should any decline in new PTW registrations prove shallow and short lived (as I believe could yet prove to be the case) then that would, in fact, in a time of declining incomes and inventory represent net growth as our products fare better relative to other spend options.
What triggered my comments last month was an apparent direction of travel that could be detected in the first quarter data that was emerging at around the time IDN went to press.
Two months on, and we now have Q2 and first half year/six months data (see pages 6 and 7) and, regrettably, we were right - those first hints of a downward trend have now crystallised and are here for all to see.
There are massive ironies surrounding what is going on. Many of the orthodox totems of a downward economic cycle are simply not there (yet!). Employment is still high, and unemployment is still low. Indeed, labour supply shortages are proving to be as much of a foot on the hosepipe of motorcycle industry growth as it is for other sectors, and as much of an issue as component shortages and supply chain inflation, including logistics.
That said, there are reports that the global response to the panic induced by the semiconductor shortages may be about to resolve itself far sooner than expected with feast replacing famine - within a few more months we may well be seeing a glut of computer components on the international market.
The current crop of data is showing that Europe's major markets are seeing new unit registrations soften through the summer, no question about it, but another irony is that the data is still at or near record levels.
All things are relative, of course, and narrative without context is a dangerous basis on which to form opinions or to start making or revising plans.
'world economic outlook update'
In terms of what we are seeing currently, the context is that while global output did contract in the second quarter of this year, and while US consumer spending undershot expectations - the US did in fact enter technical recession in Q2 - the IMF is still forecasting growth for 2022 and 2023, even if it is lower relative to their prior estimates.
Global growth is projected to slow from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January. Beyond 2023, global growth is forecast to decline to about 3.3% over the medium term.
Hence the broadly held view that any downturn (or even recession) will be of short duration and be relatively shallow - as it will be playing out in a still growing global economy.
From what we have read in the IMF's latest 'World Economic Outlook Update', they and the central banks whose data largely drives their estimates, are underestimating the scale of inflation and, from the ECB to the 'Fed' in the United States, central bankers are still trying to get "only a little bit pregnant" by not yielding the big stick of interest rises as quickly and as aggressively as they should.
This isn't because they can't see the issues, but because, frankly, they are paid not to acknowledge them in that central bank independence isn't what it used to be. Decades of economic probity have been reversed and they are back to being political footballs. The needs of the ballot box still drive governance - global and otherwise.
With the honourable exception of Poland, where growth forecasts are actually being revised upwards as the year unfolds, growth is already marginal in most economies and, in reality, not at all likely to reach the dizzy heights of the IMF's misplaced optimism.
Whether or not the presently reported downward trend sustains far enough and deep enough into the second half of the year remains to be seen, but if we assume it does, then regardless of how wildly optimistic the IMF is still being, it would take a big turn of events in the motorcycle market to see 2022 close out at much worse than negative in the low single digits in Europe's 'Big Five' markets - Italy, France, Germany, Spain and UK - where, combined, some 80 plus percent of annual new motorcycle registrations take place.
What happens in 2023, however, is another matter altogether. By the end of the year the trend data will be consistently down, even if the decline is still shallow at that stage. Under those circumstances it will need the symphonic cacophony of high inflation, rising interest rates, labour and component supply and inflation, energy pricing and supply, consumer confidence and that (not so) little matter of the fact that Europe remains, effectively, at war with Russia, to find some kind of sustainable harmony, and quickly, if the noise isn't to infect employment levels.
Once unemployment starts to rise, which, in a time of labour shortages becomes a question of the much harder to fix issues of skills and productivity rather than simply just numbers, then a year from now, we could well be looking at much of the improvement in motorcycle sales seen in the past 24 months starting to disappear in the rear view mirror.
