The health of the recreational vehicle industry, as evidenced by the record numbers attending the 42nd annual National RV Trade Show in Louisville, Ky., will have a carryover effect on the RV-heavy economy in Elkhart County, Ind., according to an article in the South Bend Tribune.
With more than 50 percent of the RV manufacturers holding significant operations in the Elkhart area, strong sales present many issues – both positive and negative – for Elkhart’s manufacturing base.
As growth continues, RVIA president David Humphreys said, startup companies will help ensure a wide variety of vehicles are produced.
“The strong will be stronger,” Humphreys said, “but (the RV industry) is easy to get in, and therefore, the competition is very high.”
The upward trend in shipments for the foreseeable future bodes well for the Elkhart area, he said.
“If the industry is thriving,” Humphreys said, “Elkhart is booming.”
However, there is concern that dramatic growth could actually create problems sometime down the road.  
“Maybe they’ll run out of workers,” Humphreys said. “I don’t think they are there yet, but that could happen.”
Phillip Penn, the president and chief executive officer of the Greater Elkhart Chamber of Commerce, said that possibility is something the county is trying to prepare for – especially considering that the number of jobs in the county has skyrocketed, according to the Bureau of Labor and Statistics.
From March 2003 to March 2004 (the most recent period of time for which national data is available), the number of jobs in the county climbed 4.6% – the 16th-largest increase of the 318 biggest counties across the nation.
The unemployment rate in Elkhart County in November was 4.4% – 1% better than the state and national rate – which Penn called close to full employment.
“It’s very difficult finding skilled workers,” Penn said. “So as companies expand and grow, it’s going to be a continuing issue. Overall, (the RV boom is) a good thing, but I think it’s going to present a problem.”
For example, Penn said, as demand increases for RV employees, workers might leave lower-paying service jobs for higher paying manufacturing jobs, hurting the service industries.
And if manufacturers have trouble filling the jobs, competition for workers will increase and wage inflation might occur, said Grant Black, an Indiana University, South Bend professor and the director of the Bureau of Business and Economic Research.
“If the industry is expected to grow steadily, that will be felt here,” Black said. “But I know there have been manufacturers that have had difficulty filling jobs. And if there becomes an insufficient amount of labor, you’ll see a lot of competition to get people at their place.”
However, labor costs in Elkhart County remain relatively low, Black said. According to the Bureau of Labor and Statistics, from 2003 to 2004, the average weekly wage in Elkhart County increased 1.3% to $625 per week, the 43rd-smallest increase in the country.
At least two factors are helping to keep labor in good supply. First, a gradual rise in the Hispanic population has helped supply plenty of workers to the county. Second, Black said 25,000 people commute from surrounding areas to jobs in Elkhart County.
But in the future, if the national economy sags and prompts a stagnant or declining RV industry, Elkhart County could feel the effects significantly, Penn noted.
In stark contrast to the rest of the country, where only about 11% of workers are employed in the manufacturing sector, Black said more than 50 percent of Elkhart’s work force is in manufacturing.
Some entities in the area are making efforts, along with Elkhart’s Economic Development Corp., to find ways of insulating Elkhart’s economy, Penn said.
Although manufacturers raved in Louisville about the fact that no RV production has been shipped overseas, Black suggested that situation could change in the future.
“It might not happen for the next 20 years or 15 years, but it will happen, just like we’ve seen with similar kinds of manufacturing,” Black said. “The county could be in trouble by putting its eggs all in one basket.”
But based on the drivers behind the recent boom and the high volume of traffic in Louisville, most RV manufacturers at the Louisville show were confident the growth in Elkhart wouldn’t stop anytime soon.
“Jobs and employment are great,” said Brian Krider, vice president of sales and marketing for Potomac RV of Elkhart. “Every week you hear about new jobs and new plants. There is so much growth right now. I think we’ll be OK.”