The ongoing recession coupled with a “credit freeze” will continue to handcuff the recreational vehicle industry this year as economist Richard Curtin, director of Consumer Surveys at the University of Michigan, revised downward his estimates to reflect a 45% decline from 2008.
In the Spring 2009 Issue of Roadsigns, Curtin estimated total shipments would retreat to 130,100 units from 237,000 last year. In November, he forecast 2009 shipments of 186,600 units.
A breakdown by segment for projected units shipped in 2009 showed: travel trailers, 76,800; fifth-wheels, 28,500; folding camping trailers, 9,000; truck campers, 1,700; Class A motorhomes, 7,400; Class B motorhomes, 1,200; and Class C motorhomes, 5,500,
Curtin emphasized, however, that the overall “uncertainty” in the economy created a wider than normal margin of error in projections for the year.
“The level of economic uncertainty is now substantially greater than at any other time in the past half century,” he said. “The range about this forecast is unusually large, plus or minus 15%.
“The lower end of the range is consistent with accelerated recession losses to the end 2009 and a credit crisis that proves largely resistant to improvement until the start of 2010. The high end of the range would be consistent with a faster exit and more robust recovery as well as the thawing of the credit freeze after mid-2009.”
In line with government projections regarding the recession, Curtin is looking for the low point in the year to occur in the first quarter. January shipments, as reported by the Recreation Vehicle Industry Association (RVIA), showed a 71% decline to 7,300 units.
“Although total RV shipments are expected to decline to 130,100 in 2009, they reach their low point in the first quarter, and then begin to post small seasonally adjusted gains in the balance of the year,” Curtin said. “The gains will be focused on conventional travel trailers and fifth-wheels, with motorhomes posting the smallest gains.”
That trend, according to Curtin, will also be reflected in consumer spending.
“The pace of the recovery in RV sales will be slowed by the shift in priorities among consumers away from spending and toward debt repayment and the restoration of savings and reserve funds, including their diminished pension accounts,” he said. “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.”