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Recreational vehicle wholesale shipments are projected to decline nearly 11% to 343,000 units in 2006 compared with last year’s quarter-century record, according to University of Michigan economist Richard Curtin.
In the spring issue of Roadsigns, Curtin said the expected decrease from 384,400 units in 2005 reflected the impact of “rising interest rates, higher fuel prices and diminished home equity withdrawals.”
He added that shipments are still anticipated to be the third highest annual total in 25 years due to “strong employment prospects and renewed gains in household income.”
Curtin noted that his 2006 forecast did not reflect a “temporary demand for emergency shelter” that may surface again during this year’s hurricane season.
Although Emergency Living Units (ELUs) built specifically for the Federal Emergency Management Agency (FEMA) were not included in 2005 shipment totals, Curtin acknowledged that travel trailer totals were boosted by the sale of conventional units off dealers’ lots.
“The data indicate that shipments of RVs (in 2005) to meet consumer demand was somewhat lower than normal as the industry focused its productive capacity on meeting emergency shelter needs,” said Curtin.
According to Curtin’s projections, travel trailer deliveries will retreat from ‘05’s inflated levels but still represent nearly half of 2006 shipment totals, while all other categories are expected to show slight declines. He said motorized deliveries would continue to be impacted by a soft Class A motorhome market, but would incur a smaller downturn than the 14.5% drop in 2005.
“Motorhome sales are sensitive to more limited withdrawals due to slower growth in home values and higher mortgage rates,” Curtin said.