Anyone despairing about the possibility of an economic slowdown may want to visit Indiana’s Elkhart County in northern Indiana for a boost.
The Atlantic reported that Elkhart County is the capital of the recreational vehicle industry, with 65% of all RVs made in the county, according to the Recreational Vehicle Industry Association (RVIA). And right now, the recreational vehicle industry is doing very, very well. “We’re going gangbusters,” reported Wes Bogan, marketing director of Thor Motor Coach. The RV industry predicts that 2017 will be a banner year, with manufacturers shipping a record 438,000 units, up 4.4% from 2016.
This is good news not just for the thousands of people employed in the RV and related industries in Indiana. Usually, economists look at some fairly standard indicators to assess the economy’s health: new claims for unemployment insurance filed by the recently jobless, consumer confidence surveys, and the consumer confidence index, which measures how Americans feel about the economy. (Some also look to wackier signs: Alan Greenspan has a theory that an uptick in men’s underwear sales is good economic news.)
But RV sales turn out to be a pretty good predictor too: When RV sales are doing well, the economy follows; when RV sales tank, the economy is soon to tank too.
The RV industry has repeatedly fallen in advance of more widespread economic troubles. RV sales started dropping in 1999; the economy did not crash until 2001. Between 2006 and 2007, RV sales again dropped—this time 9.5%. The GDP still grew in that period, at an annual rate of 4.5%. But between 2007 and 2009 GDP growth slowed to 1.7%, and dropped 2% between 2008 and 2009.
In fact, RV sales track closely with the Conference Board’s Leading Economic Index, an oft-used measure that pulls together a series of factors, including average weekly hours in manufacturing, building permits issued, average weekly claims for unemployment insurance, manufacturers’ new orders, stock prices, and average consumer expectations, to predict how the economy will fare.
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