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Strong home sales means strong van market

LCV sales are dictated by the state of the economy - much more so than cars. The majority of vans are purchased by businesses and they will only invest when the market is buoyant. Retailers therefore need to keep an eye on broad-based economic indicators, like the threat of higher interest rates, and market confidence to gauge future demand. The housing sector, which is currently buoyant, is a good indicator.

Analysts are predicting a slowdown in the UK economy later this year, on the back of a slowdown in consumer spending. The rise in National Insurance Contributions announced in the Budget has added to the uncertainty, and could persuade companies to delay making major purchases or postpone contract hire agreements - a current growth market.

But the long-term outlook is fundamentally positive, particularly with the US economy showing signs of recovery. CAP Network forecasts annual light commercial sales will rise to 260,000 this year, compared to 254,000 in 2001. An extra 6000 units may not sound much, but that represents an extra £84m or so in additional turnover expected to be generated by the segment this year.

Light commercials may not be glamorous. But there's nothing wrong with the figures.

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