Curtin: No ‘Double Dip,’ But A Slow Recovery
Richard Curtin, director of the Surveys of Consumers at the University of Michigan, told the Recreation Vehicle Industry Association (RVIA) board of directors the national economy will avoid a double-dip recession but continue its recovery at a slower pace that will moderate wholesale RV shipments in the upcoming year.
Curtin made these projections in a presentation to the RVIA board at its annual September meeting today (Sept. 21) at the Hotel Park City in Park City, Utah, according to an RVIA news release.
Focusing on the national economic outlook, Curtin said that among the scenarios for 2011, there was the greatest probability for a “slow growth” model. He defined this as GDP increasing by 2.5%, unemployment at 9.6%, job creation hitting 100,000 jobs per month, personal income growth at 2.4%, housing starts at 780,000, and slight gains in consumer confidence and credit conditions.
Curtin said that there is only a one-in-10 chance that the economy will slip back into a double-dip recession.
Gradually rising consumer sentiment, a modest gain in consumer spending and an improved credit market will accompany this slower growth. However, continued high rates of unemployment and sluggish income gains will continue to be a drag on the economy.
Curtin also said that the greater probability for the “slow growth” model would put wholesale RV shipments in the 259,000-unit range that was projected in the Fall 2010 issue of RV Roadsigns. In that projection, shipments are expected to reach 239,900 units by the end of 2010 and 259,600 units in 2011.
In his remarks, Curtin also discussed the new consumer mindset that businesses need to consider as a result of the economic hardships of the past several years.
“Consumers are reconsidering their spending and saving habits,” Curtin said. “Given the strong underlying demand for the RV lifestyle, consumers will gravitate toward products that offer an equivalent experience at a price that meets new economic constraints.”
He advised companies to “rightsize” rather than “downsize” as they move forward. “Rightsizing means delivering an optimal mix of size, convenience, and features to meet the new realities facing consumers,” he added. “This may mean smaller units with fewer features.”