Curtin Upgrades ’06 Shipment Projections
The sustained strength of the travel trailer market through the first quarter raised 2006 shipment projections by University of Michigan economist Richard Curtin.
In the summer issue of Roadsigns, Curtin said he expects total deliveries to reach 376,900 units, a 2% decline from last year’s 384,400 units, which would make it the second strongest year since 1978. In the spring edition of Roadsigns, Curtin estimated a nearly 11% decline to 343,000 units.
“More RVs were shipped in the first quarter of 2006 than in any prior quarter during the past quarter century,” Curtin said in the report. “All of the recent gain was due to growing popularity of conventional travel trailers, which also posted its best quarter in more than 30 years.”
According to the Recreation Vehicle Industry Association (RVIA), March travel trailer shipments showed a 30% increase over 2005 with 23,000 deliveries, compared with 17,700 units, and 31% growth in the first quarter to 59,900 units versus 45,800 the prior year. Curtin said that when travel trailers deliveries were combined with fifth-wheels, that market would represent nearly three of every four units shipped in 2006.
Curtin emphasized that the sharp gain in the travel trailer sector, which “greatly exceeded initial estimates,” may reflect continued impact from the supply of hurricane-related units to the battered Gulf Coast region.
“It is difficult to disentangle normal trends in consumer demand from purchases made out of dealer inventory by FEMA and other private parties with the intention of using the RV in connection with last year’s Gulf Coast hurricanes,” he said. “The true extent of hurricane-related purchases may have been underestimated, or the resurgent strength in travel trailer demand may have been initially obscured by the hurricane-related period. Current estimates are based on the view it is primarily due to resurgent demand.”
Curtin maintained his view that prolonged weakness in the Class A market would signal a downturn in 2006 motorhome deliveries, although he said it would be less precipitous than the 14.5% drop in 2005.
“Motorhome retail sales are sensitive to smaller withdrawals of home equity due to slower growth in home values and higher mortgage rates,” Curtin said.