Curtin: Industry’s on a Gradual ‘Road to Recovery’
Despite recent recessionary setbacks, relative gains posted thus far this year by travel trailers are pointing to a “road to recovery” for the RV industry, Richard Curtin, director of consumer surveys at the University of Michigan, reports in his fall “Roadsigns” prognostications for the Recreation Vehicle Industry Association (RVIA).
“Total RV shipments were 42,300 in the second quarter of 2009,” he reports. “Although this was the lowest second quarter reading since 1982, year-to-year declines have begun to narrow, and signal that RV shipments are on the road to recovery. The greatest relative gains since the start of 2009 were made by travel trailers and the least by motorhomes.
“While total RV shipments are expected to fall to 146,200 in 2009, the low point was in the first quarter,” he adds. “RV shipments can be expected to begin posting seasonally adjusted gains in the balance of 2009 and into 2010. The gains will focus on conventional travel trailers during the next year or so, although all types of RVs will begin to improve.”
Looking ahead, Curtin predicts total shipments of 185,800 units in 2010, a 27% pickup from 2009 and a marginal upgrade from the 169,500 units he had forecast for 2010 back at RVIA Committee Week in June. While it’s definitely good news, those numbers still lag significantly behind the 237,000 shipments the industry posted in 2008 or, even more so, totals of 390,500 units in 2006.
Curtin looks for renewed RV sales growth in the second half of ’09 due to improved economic conditions and the easing of the financial crisis. On the other hand, he warns, lagging consumer demand will remain a factor through most of next year due to continued job losses, shorter work hours, smaller income gains, tight credit and declines in household wealth as well as Americans’ need to restore savings and pension accounts.
Most notably, he points out, motorhomes’ share of total shipments are expected to fall to 7.8%, about a third of the motorized share in 2000.
“After the energy shocks of the 1970s,” adds Curtin, “motorhome sales bounced back to capture one-third of the total market from 1983 to 1990. Likewise, the current dominance of travel trailers is likely to yield market share over time due to the downsizing of household tow vehicles.”
All in all, Curtin, however, continues to look for a slow – but certain – turnaround from the recent downturn.
“The recent financial meltdown has affected every aspect of the RV industry, including manufacturers, dealers and consumers,” says Curtin. “The transformation of the industry has only begun and can be expected to be more comprehensive and require more restructuring than following any prior recession. Unlike past recoveries, the full restoration of RV sales will be slow and uneven.
“Importantly, given the strong commitment of the consumers to the RV lifestyle, there is no question about the favorable prospects for the industry. It will simply take longer than usual for consumers to reestablish their economic footing following the longest and deepest recession since the 1930s. The same can be said about financial institutions as they have been slow to establish new regulations and restore more normal credit flows, a key to a healthy RV industy.”