Harley-Davidson is more than just an iconic American brand. It is also a surprisingly good reflection of the forces shaping the US economy as a whole. The motorcycle company reported its fourth-quarter earnings last week, and the details show a company that is as typically American as the roaring sound of a Hog on the highway.
Here are the five ways the company's financial results explain the forces shaping the US economy.
Coming back – but not all the way: Harley-Davidson shipped 247,625 motorcycles in 2012, up 6.2 per cent from 2011 (that's an extra 14,508 motorcycles out the door). The company forecasts a similar gain in 2013.
That is up handily from the recent past: the company shipped only 223,023 motorcycles in 2009, as the steep global downturn meant consumers were in no shape to spend tens of thousands of dollars on a motorcycle. But while the gains since then have been decent, it's worth remembering that Harley – and the US economy as a whole – is nowhere near its potential.
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In 2006, the company shipped a whopping 349,196 motorcycles. In other words, it would take much stronger growth for Harley-Davidson's production to return to the track it was on before the recession. The same is true of the US economy as a whole: economic output in 2012 was close to $1 trillion below the level the Congressional Budget Office estimates as the economy's potential. The missing motorcycles are part of that ''output gap''.
