Despite last week’s announcement that Monaco Coach Corp. will close three plants in Elkhart County, Ind., an industry analyst said the long-term future is still good.
Coburg, Ore.-based Monaco will eliminate up to 1,400 jobs when the plants close in about two months.
Mark Bowersox, recreation vehicle director for the Recreation Vehicle Indiana Council, believes the industry will rebound, but only after conditions get worse, according to the South Bend Tribune.
“The future long-term is bright,” Bowersox said Friday, the day after Monaco announced the plant closings in Elkhart, Wakarusa and Nappanee, “because the economic climate and conditions that are affecting the business right now appear to be short term.”
Bowersox cited the uncertain stock market, volatility of fuel prices, housing foreclosures and the shake-up in the banking industry as other contributing factors to the RV industry’s plight.
“Fuel prices are a part of the equation,” he said. “But a lot of people around this industry a whole lot longer than me will tell you the volatility is just as big an issue as the cost per gallon.”
Stabilizing fuel prices would benefit the industry, Bowersox said, while adding, “All the other issues are a factor in what is negatively affecting the business right now.”
Grant Black, an economics professor at Indiana University South Bend, agrees with that assessment.
“Gas prices probably have some effect,” he said. “I doubt it’s the predominant effect.
“If you are buying an RV, the marginal changes in fuel costs will likely not be significant to changing your behavior.
“I think just the major uncertainties consumers have,” he said, citing tight credit markets, the weakening of the economy and how long the soft economy will last.
“You combine all those and that’s probably the biggest factor,” he said.
Layoffs in the RV industry total more than 2,900 in Indiana so far this year, Bowersox said.
“What you are seeing is a reflection of the national issue, the state of the RV industry nationwide,” Bowersox said. “Indiana produced 70% of all the RVs made in the country in 2007, so if you see a slowdown in sales nationwide, Indiana and Elkhart County in particular, are going to be the hardest hit in the slowdown in sales.”
It may get worse before it gets better, he said.
Bowersox said that the current prediction of Richard Curtain, an economist at the University of Michigan who studies the industry, is that the industry’s problems will bottom out in the first quarter of 2009 and begin to see growth in the second quarter.