In an outlook that is fairly consistent with previous forecasts, total RV industry shipments are expected to decline 11.3% in 2007 to 341,600 units after setting a 25-year record in 2006.
That’s the latest prediction by University of Michigan economist Richard Curtin in the winter edition of “Roadsigns,” a quarterly newsletter sponsored by the Recreation Vehicle Industry Association (RVIA) released today (Nov. 21). And it’s a bit lower than his fall forecast in which ’07 shipments were predicted to drop 10.7%.
“Several factors are anticipated to restrain demand in 2007, including the end of the inventory adjustments due to (Hurricane Katrina) demand, high interest rates and diminished home-equity cash-outs,” Curtin said. “Importantly, renewed gains in real wages will help bolster growth in RV demand in 2007.”
Curtin said that he expects the down cycle to be short-lived. “The slowdown in RV shipments is expected to be brief, and 2007 shipments are expected to be the fourth highest total in the part quarter century,” Curtin said.
He added that the underlying demand for RVs among consumers “remains quite strong.”
Curtin’s winter forecast is that 2006 will end with RV shipments of 385,500. That is some 1,500 units more than were shipped in 2005, which also was touted as a record year. In his fall update, Curtin had estimated that 2006 shipments would decline by about 300 units compared to 2005.
Conventional and fifth-wheel trailers will account for a record 75% of shipments versus motorhomes in 2006, compared to 50% 10 years ago, he said. Towable market share, however, is expected to decline in 2007 for only the third time since the early 1980s.
“The extent of the decline will depend on competitive prices and features, the availability of tow vehicles and the preferences of aging buyers,” he said.
Clearly, both wholesale shipments and retail sales were affected this year and last by hurricanes Katrina and Rita which struck the Gulf Coast in rapid succession in August and September of 2005. Private buyers and the Federal Emergency Management Agency (FEMA) cleared RV dealers’ lots in the aftermath of the hurricanes, and shipment numbers through mid-year reflected dealers restocking their inventory, according to Robert M. “Mac” Bryan, RVIA vice president of administration.
“That is why we had such a strong first quarter (in 2006),” Bryan said.
Bryan noted that the 341,000 units projected for shipment next year represents the rolling five-year shipment average. “And the last five years have been very good,” he said.?