As the RV industry goes, the overall economy follows, according to experts — and as a result, our beloved lifestyle recently has been making headlines.
Year-to-date total wholesale shipments of recreation vehicles are down 20.3 percent, and some believe RV sales serve as a kind of bell weather of things to come for the overall economy.
Economic experts say it’s generally because consumers stop buying (or seeking to finance) more pricey, big-ticket discretionary items like RVs (and cars and trucks) when money starts to tighten.
The Atlantic looked at the phenomenon in late 2016 — when the RV industry was especially robust. Per the report, the RV industry has repeatedly fallen in advance of widespread economic troubles. The magazine noted drops in RV sales in 1999, 2006, and 2007, all dates that were essentially precursors to rough economic seas ahead.
Further, The Atlantic said that RV sales track closely with the Conference Board’s Leading Economic Index, an oft-used measure that takes into account numerous factors to predict how the economy will fare.
It makes sense when you consider how important RVing is to different parts of the economy.
The RV industry has a $114 billion economic impact, according to the results of the 2019 RVs Move America Study, research commissioned by the RV Industry Association (RVIA). The industry provides 596,355 jobs and $32.2 billion in wages.
Of course, there are other ways RVs have impact on the economy.
“Owners might pay thousands of dollars to have maintenance done before a trip and then thousands more for fuel and travel expenses,” wrote Amber Hestla, of StreetAuthority. “RVs can even be expensive when they aren’t being used. Many owners need to pay to store their vehicles since they don’t have room at home for such large vehicles.”
So why the concern right now?
According to RVIA, RV shipments are projected to total 416,300 units in 2019, down 13.9 percent from the 2018 year-end total of 483,700 units, before gaining 2.4 percent to 426,700 units in 2020.
“The decline in sales, I believe, shows a drop in the level of consumer confidence is building,” Hestla wrote.
Ball State economist Michael Hicks frequently is cited in the stories because he tracks the RV sector.
Hicks told the Indianapolis Star that a looming recession is the result of disruptions in international trade by President Donald Trump’s trade wars and tariffs imposed on key U.S. foreign trading partners like China, Mexico, and Canada.
And that comment was made before this past Friday, when the stock market was sent into a tailspin by Trump’s “order” that American companies find an alternative to China. Obviously, it remains to be seen what will happen when the markets open Monday.
Still, some, like Richard Curtin, director of the survey of consumers at the University of Michigan, indicate it isn’t a time of doom and gloom and he urges people to keep the projected totals in check.
Consider this: even if the projections turn out to be accurate for 2019 (416,300 units shipped), that’s still way better than the 165,700 shipped in 2009.
Going further, Curtin notes that the projected annual totals would rank as the fourth and fifth highest in the last 40 years, trailing only the totals from the previous three-year period that saw the RV industry reach an all-time high.
Curtin said he believes RV shipments will benefit from renewed growth in wages and employment, low inflation and interest rates, and gains in household wealth through the remainder of 2019.
“Heightened concerns about the state of the economy early in the first quarter have been replaced by renewed optimism as wages and employment posted significant increases, unemployment fell to a half-century low and stocks rebounded to new record peaks,” said Curtin.
The longtime RV industry researcher believes that the right quality and mix of RV products is crucial for attracting and keeping millennials as well as repeat baby-boomer buyers.
If that mix is found, according to Curtin, RV sales will continue to benefit from demographic trends.
And it seems like that will be good for everybody directly or indirectly connected to RVs and RVing.