Baird Poll: Marine Dealers Enjoy June Gains
Editor’s Note: The following is a survey conducted by R.W. Baird & Co. and the Marine Retailers Association of the Americas (MRRA) with 117 dealers assessing June retail trends in the boating industry.
Boat demand increases in June. After disappointing May industry retail results, retailers report positive retail trends in June. We’re reluctant to pinpoint growth at this time. Net, we remain confident that the wealth effect will release pent-up demand in the deeply depressed boat market.
* Sentiment improves. The MRAA/Baird Marine Retailer Sentiment Index improved from weather-driven lows – concurrent with positive retail trends in June. Sentiment stands at 59 based on current conditions and 71 based on the 3-5 year outlook (50 is neutral).
* Inventory elevated as end of peak season approaches. Despite better retail trends,
retailers appear acutely aware that the end of the prime selling season is quickly
approaching. Baird reported that 49% of retailers report that new boat inventory is “too high” versus 16% reporting that inventory is “too low.” As such, retailers realize that there is less time to liquidate inventory – which appears to show up in our inventory comfort index.
* Credit remains healthy. Marine retailers report available credit at both the retail and wholesale levels. 59% report that retail credit conditions are “favorable,” while 57%
report “favorable” wholesale credit conditions.
* Bullish on affluent marine consumer. We remain bullish on discretionary spending as affluent consumers benefit from monetary policy aimed at reflating asset values, creating investment wealth. Although the late start to spring deferred demand and condensed the selling season, we expect the wealth effect to trigger the release of
pent-up demand over time, particularly in the deeply depressed boat market.