Editor’s Note: The following is a column from Recreation Vehicle Dealers Association (RVDA) President Phil Ingrassia assessing prospects for the RV industry, and the economy as a whole, for 2014.
The coming of a new year brings out the economic forecasters – and there’s no shortage of projections on how the economy will fare moving forward. We know that RV sales are expected to rise again in 2014, but the rest of the economy needs to catch up if our industry is to continue to grow.
In its most recent official forecasts, the Federal Reserve reported that 2013 U.S. economic growth was on track to be 2% to 2.3% by the end of the year. The Fed forecasts a 3% rise in 2014 and as high as a 3.5% improvement in 2015. Some economists feel growth could edge even higher than those projections if energy prices remain stable and if politicians can stay out of the way.
Over the past several years, there always seems to be some crisis that inhibits growth, and many times the road blocks seem to come out of Washington. The budget fights between Congress and the Obama administration this year are a prime example. First was the budget sequester, then the government shutdown, and finally the stalled rollout of Obamacare, which created uncertainty for business and hurt consumer sentiment.
Author and economics columnist Neil Irwin writes that the good news for 2014 is that most of the bad things of the past few years are now “priced in” to the economy. “In other words, the things that dragged down growth the last few years look unlikely to recur,” he says. In 2014 “the biggest risk for us would be homemade troubles” coming out of Washington, says Jan Siegmund, chief financial officer of Automatic Data Processing (ADP), the payroll company.
One potential storm on the horizon is another debt-ceiling debate coming up in Washington, but both parties seem to want to avoid another fight and shutdown.
ADP said 130,000 people were added to private payrolls in October, led by California with an increase of just over 19,000. It’s interesting that since the downturn, more people have been paying attention to ADP’s National Employment Report, which provides a monthly snapshot of U.S. non-farm private sector employment based on actual transactional payroll data. (If you’re interested in ADP’s national and regional data, you can access it monthly at www.adpemploymentreport.com.)
Of course, as ADP points out every month, job growth really holds the keys to the economy. Based on their buying behavior, RV consumers are doing better than the average Joe, but for the longterm health of the industry, it’s important that the total number of people employed improves.