There was a different feeling in the air at last week’s NADA convention in Las Vegas, something that hadn’t been felt in such a long time that it seemed almost foreign.   

For the first time in years, optimism undeniably strode through the doors of the convention center on opening day and stayed until the last attendee had cleared out. 

Everyone could sense it.  From dealers heartened by January’s nearly four-year high in new vehicle sales, to exhibitors whose booth traffic and takeaway business was radically improved from the past few years.

There’s legitimate reason for it.  The economy is strengthening at a faster clip, employment is at a three year high, and consumer demand continues to rise.  Five months of nearly continuous growth in new vehicle sales – without excessive increases in incentive spending mind you – is a clear testament to this.   

Don’t get me wrong, there are still very real headwinds to be concerned with.  Home prices are still falling, the Euro crisis hasn’t been resolved yet, and rekindled turmoil in the Middle East threatens to pressure up fuel prices once more.

But the state of the housing market has lingered for so long we don’t see it having an impact on the economy one way or the other this year, and it looks like Europe’s issues will leave us relatively unscathed.

Regarding the Middle East, Syria is a small player on the world stage in terms of oil production; in fact, Syria produces nearly 80% less oil than Libya.  Tensions with Iran are the real wild card here, but right now we’re crossing our fingers that this doesn’t move too far beyond posturing.

Considering all of this, we, like our fellow convention goers, believe that 2012 has the potential to put us farther down recovery road than any year since the recession ended.

In fact, we’re forecasting that even after a three year run that’s seen used prices explode, they’ll grow an additional 1.8% this year.

Whether we catch a reprieve this year from natural disasters and popular revolutions is yet to be seen, but the spreading contagion of optimism in effect in Las Vegas adds to the feeling that this year is going to be a good one.

See February’s edition of Guidelines for an in-depth review of NADA’s 2012 used price forecast for light vehicles.