Wells Fargo Louisville Survey is Bullish On ’17
According to an industry survey conducted during the 2016 National RV Trade Show in Louisville, Ky., by Wells Fargo CDF, 87% of RV industry professionals expect their company’s sales to increase by at least 5% in 2017. Of note, 42% of the respondents said they expect sales to grow more than 10%, up from 31% last year.
The Louisville survey is not to be confused with the “2017 RVB/Wells Fargo Dealer Survey,” a 20-question poll e-mailed Feb. 13 to hundreds of North American RV retailers in an effort to gauge a summary look back at 2016 and a speculative glance forward into retailers’ outlooks for 2017. Completed surveys, due back to RVB by the end of business on Feb. 27, are to appear on RVBUSINESS.com and in the March/April issue of RVBusiness magazine.
As for the Louisville survey, Wells Fargo CDF RV and SV President Tim Hyland said the results indicate, “optimism is continuing through the RV industry” with 2016 being the seventh consecutive annual increase in RV shipments since the Great Recession and the highest total in more than 40 years.
Hyland noted that reasons for the industry to be optimistic include: GDP growth is expected to be about 2.1%; inflation is forecast to be moderate in the 2.3 to 2.4% range; and anticipated two- or three-quarter point rate increases by the Federal Reserve.
“It’s just easy to see why the industry is feeling good,” Hyland told RVBUSINESS.com. “With the economy in the United States on a moderate growth pace and no definable disruption events, it’s understandable that the industry is looking on that as a positive and therefore expects the growth — maybe not the same growth rates we’ve seen in the last year or so, but to see growth continue in 2017.”
The survey was conducted between Nov. 29 and Dec. 1 at last year’s Louisville Show. Of the 81 respondents, about 73% were dealers, 18% were manufacturers and 9% were other participants at the show. The survey consisted of a series of questions:
- “What is your biggest business concern for 2017?”
- “What are you most optimistic about in regards to your business in 2017?”
- “What type of RV do you believe will experience the most growth in 2017?”
- “How much do you expect sales to increase in your segment of the RV industry in 2017?”
According to survey results, for the fifth year in a row most respondents — 49% — expect the travel trailer segment to have the highest growth rate, followed by motorhomes (28%) and fifth-wheels (22%). Last year 44% of survey participants cited travel trailers as the leading segment.
When asked about the business impact for the year ahead, 57% of the respondents cited “consumer demand” as what they were most optimistic about. Conversely, the top concern for respondents, at 40%, was also consumer demand.
“Since personal consumption expenditures typically account for about 70% of GDP, it’s easy to understand why consumer demand will be a focus of interest. The industry is optimistic that demand, and by default the overall economy, will continue to be strong, but they’re watchful of any signs of that changing,” reasoned Hyland, who added that from Wells Fargo CDF’s perspective all signs appear positive as well.
“We’ve seen very consistent numbers in the portfolio performance,” he said. “We see that turns are remaining above two times and aging is under 10%, which are both good numbers. Our portfolio metrics support the idea that, while we’re seeing growth, it’s good growth and it’s growth that the industry is managing very well.”