At the midpoint of June, we continue to see wholesale prices in Canada decline slowly. All Car segments for 2-8-year-old vehicles fell​ by 0.58%, almost the same as last week’s 0.60% decline.

Over the last​ eight weeks, wholesale car values have seen a 0.54% decline on​ average each week.​

The Truck/SUV/Crossover segments fell by 0.68%, which is a smaller drop than last week’s 0.85% decline.​ On average over the past eight weeks, the truck segments have declined by 0.61%. Please note that these​ are weekly adjustments, so when you consider how much of a decline this would be over 52 weeks over a​ year, the numbers are daunting.​

The Canadian Black Book Value Index for 2-6-year-old vehicles fell an additional 3.20 points for May, very​ close to April’s record decline of 3.58. There is still half of June to come, however directionally we are​seeing a similar decline, perhaps even slightly steeper for the month.

It remains our outlook that wholesale prices will continue to decline until we reach a total decline of 17% industry-wide. We have not yet seen retail asking prices follow the wholesale trends, but that is to be​ expected in the coming months.

In the past week, the Organization for Economic Cooperation and​ Development (OECD) released its global economic outlook. The view was quite stark when compared to the​ relatively positive view that existed only a few months ago.

The report expects that output (GDP) will​ contract by 9.4% in 2020 if there is a second wave of COVID-19. If the nation escapes a resurgence of the​ virus, the reduction in economic output would “only” be 8%.

The recovery of the Canadian economy will​ likely not get back to pre-pandemic levels until the end of 2021 or beyond. During that time period, it is​expected that unemployment will remain high.