RV sales hit their cyclical low earlier this year and the market has gotten better, but the University of Michigan’s Dr. Richard Curtin, Ph.D., does not see retail demand for RVs improving much during the remainder of this year or next year.
Curtin, senior associate research scientist at the U of M’s Survey Research Center, issued his forecast during the recent Recreation Vehicle Industry Association (RVIA) Market Information Committee meeting in Tysons Corner, Va.
“We are not going to see a full-fledged recession, as an economist would define a recession,” Curtin told the gathering. “Overall, for a transition year, it (2001) is going to be a good year. It’s going to be down significantly (from 1999 and 2000), but it’s not going to be a recession year.
“The bad side is there is not going to be a big gain next year,” Curtin said.
Basically, Curtin believes the Federal Reserve, through interest rate cuts, prevented consumer confidence from falling further. But after five rate cuts so far this year, Curtin does not see consumer confidence getting much better for quite some time.
For one thing, mortgage interest rates have not come down as much as short-term loan interest rates, such as the prime rate, so Curtin does not believe there will be a burst of consumer spending as a result of mortgage refinancing.
Also, consumers have become worried about unemployment, even though the national unemployment rate remains about as low as it can get, Curtin said.
“They (consumers) think that extraordinary period (of economic growth occurring during the 1990s) is over and that we are going to have several years of very slow growth,” Curtin added.