The ongoing recession and tight credit will continue to affect RV sales in 2009, according to the latest research of economist Richard Curtin, director of Consumer Surveys at the University of Michigan.
In his Summer issue of Roadsigns, which is prepared for members of the Recreation Vehicle Industry Association (RVIA), Curtin said RV shipments are expected to decline to 136,500 units this year. While this estimate is well below his forecast of 186,600 issued last November, it is a slight improvement from his forecast that appeared in the Spring 2009 Issue of Roadsigns, when he estimated total shipments this year would retreat to 130,100 units
Curtin will expand upon his latest forecast as one of the featured speakers at RVIA’s Committee Week, which gets underway today in Washington, D.C.
“They (shipments) reached a lowpoint in the first quarter of 2009, and can be expected to begin posting small seasonally adjusted gains in the balance of 2009 and into 2010,” Curtin stated. First-quarter shipments totaled 30,400, off 63% from the first quarter of 2008.
“The gains will be focused on conventional travel trailers during the next year or so, although all types of RVs will improve,” he said.
Further, he stated, “The recession is expected to end by the close of 2009 due to the favorable impact of the stimulus package and the revival of more normal credit conditions. Unfortunately, the recovery is expected to be abnormally slow. The economic outlook still remains quite uncertain, which has clouded prospects for the RV industry as well.”
“The pace of the recovery in RV sales,” Curtin continued, “will be slowed by the shift in priorities among consumers away from spending and toward debt repayment and the building of savings and reserve funds, including their diminished retirement accounts. Although credit will not be as free-flowing as in the past, RV buyers are excellent credit risks and can be expected to return to the market.”
By segment, Curtin offered these shipments forecasts for 2009:
- Travel trailers, 82,600.
- Fifth-wheels, 29,500.
- Folding camping trailers, 10,900.
- Truck campers, 2,000.
- Class A motorhomes, 5,400.
- Class B motorhomes, 900.
- Class C motohomes, 5,200.
Uncertainty Clouds RV Forecast
Curtin concluded with the observation that his forecast bears some uncertainty. He said, “When the economy finally reaches the bottom of its cycle, the initial phase of the recovery is typically anticipated to be as rapid as the descent into recession. That’s a natural assumption since it mirrors the typical cyclical pattern of the past.
” The current recession, however, is hardly typical as it involved a virtual freeze of credit markets and the deepest and longest decline in production and income during the past half century. The full restoration of normal credit flows will be a painstakingly slow and uneven process.
“Moreover, the impact of the new financial regulations, which are as yet largely undeveloped, will continue to add uncertainty to financial markets and lenders. While RV shipments are forecast to be 136,500 in 2009, the range about this forecast is unusually large, plus or minus 15%, with a comparable range for all various types of RVs covered in this forecast.”
The University of Michigan also prepares a monthly report on Consumer Confidence, which took a big jump in May, according to the report.