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Report: June U.S. Spending, Incomes Stall Out

August 2, 2011 by · Leave a Comment 

Consumer spending dropped in June for the first time in nearly two years and incomes barely rose, signs the economy lacked momentum as the second quarter drew to a close, according to a Reuters report.

The U.S. Commerce Department said on Tuesday (Aug. 2) consumer spending slipped 0.2%, the first decline since September 2009, after edging up 0.1% in May. Adjusted for inflation, spending was flat after a 0.1% decline. Incomes rose just 0.1%.

“It certainly gets us off on a very soft footing for the third quarter and does call into question a bit the notion of a second half pick-up,” said Julia Coronado, North America chief economist at BNP Paribas in New York. “We are not seeing it yet going into the third quarter.”

The data, which was incorporated in a report on U.S. economic growth on Friday that showed the economy expanded at less than a 1% annual rate over the first half of the year, was the latest to underscore the recovery’s frail state.

A report on Monday showed manufacturing activity hit a two-year low in July, leading some economists to dial back expectations for growth over the second half of the year.

For the third-quarter, many economists have scaled back growth estimates to around 2.5% from 3%.

“If the recovery is ever going to gain speed, it will have to come from households deciding they want to spend money again,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

 

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Auto Sales Driving North American Recovery

July 21, 2011 by · Leave a Comment 

The following is an article appearing on Macleans.ca offering an upbeat look at the auto industry’s recovery after near death in 2009.

In 2009, when there seemed no bottom to how far the economy might fall, a series of photographs circulated online showing thousands of unsold cars piling up around the world. With consumers paralyzed by the credit crisis, automakers filled docks, vast meadows and even abandoned airport runways with the vehicular glut. The striking yet surreal aerial photos could have hung on a gallery wall were it not for the economic devastation they represented. Today, some economists are once again warning the world is on the cusp of another crisis as Greece burns, gas prices remain high and America’s job market stagnates. Only this time instead of pulling down the global economy, the auto sector is seen as the best hope of jump-starting the recovery.

Call it Cars 2—not the animated big-budget sequel making its way through theatres, but the return of cars and trucks as key drivers of the critical U.S. economic machine. “Americans still love their cars,” says Michael Burt, who tracks industrial economic trends for the Conference Board of Canada. “The types of vehicles they may purchase will change, but they’re continuing to buy.” The question now is, how long can America’s love affair with metal and rubber overcome the economic headwinds?

On the surface, the auto sector’s performance in June seemed disappointing. When American sales for the month were tallied, the results fell short of analysts’ forecasts. Sales growth came in at 7.1%, according to Autodata Corp. That was less than the 8% to 10% analysts had predicted, and slower than the growth registered in May, which was already a sluggish month.

However, the big-picture data masks dramatic improvements in the industry. Most importantly, Detroit carmakers are on a roll. General Motors sales climbed 11%, while Ford sales increased 14%. Chrysler, meanwhile, saw its sales jump 30%, the biggest increase since 2007. It was a similar story in Canada, where the Big Three of Detroit all saw big gains in sales, while the Japanese carmakers posted declines. The overall numbers would have looked a lot better were it not for the fact that Japanese automakers are still recovering from the earthquake and tsunami in March, which severely disrupted their supply chains. In June, Toyota’s sales fell 21%, while Honda saw a decrease of 24%. In the case of Toyota, its inventory of vehicles collapsed 40% compared to last year. “It’s very difficult to sell cars and trucks when you don’t have any,” Don Esmond, senior vice-president of operations for Toyota Motor Sales USA, told the Detroit Free Press.

Auto sales in the U.S. are likely to come in 20% below their annual average of 16 million this year. But the important thing is that gap is closing much faster than was expected even six months ago. “Automakers don’t have a problem selling,” says Burt. “They have a problem meeting demand because of short supply. That’s good news for the industry.”

It also bodes well for Canada’s auto industry, since 84% of vehicles built here are sold in the U.S. According to Carlos Gomes, an economist at Scotiabank, production at Canadian auto factories is expected to jump 21% in the third quarter, compared to just a three per cent gain in the first half of the year. That, in turn, is set to drive profits in the Canadian auto assembly industry to close to $1 billion this year, predicts Burt, up from a paltry $114 million in 2010.

Another sign of the demand in America is the sharp rise in prices for used cars in recent months. That’s because vehicle output declined so sharply after 2008, leading to a shortage of two- to three-year-old vehicles for resale. In June, the National Automobile Dealers Association estimated that trade-in values would rise as much as 17% that month. Last week, a Florida Toyota dealership made headlines when it paid more to buy back a used Prius hybrid from a customer than the dealer had sold the car for 15 months earlier, despite high mileage.

One key factor powering sales is the pent-up demand for new cars and trucks. The average age of vehicles on America’s roads is now 10 years, compared to a historical average age of eight years, says Gomes. Auto lenders have also opened up the taps, even for those drivers with dubious credit, according to a new report from Equifax, the consumer credit bureau. Just as important, the carmakers, particularly Ford and GM, have revamped their offerings with stylish small cars at a time when consumers are struggling with high gas prices. While the Ford F-Series and Chevy Silverado pickup trucks sold the most overall, the Chevy Cruze, Chevy Malibu and the restyled Ford Focus were the top-selling cars. (The Toyota Camry is typically number one, but vehicle shortages knocked it out of the top spot.)

With America’s housing market still a wreck, no one expects the auto sector alone to steer the country to boom times. That would be akin to a Ford Focus pulling a burning motorhome up the side of a mountain. But the industry is helping keep the recovery in gear. “The ramping up of production in the auto sector is going to make a significant contribution to overall economic activity in the coming months,” says Gomes at Scotiabank, who predicts vehicle production in North America will jump 18% from last year to an annualized 14 million units, putting it at the highest level since before the economy began to crater in mid-2008. As work on the assembly lines picks up, Gomes says global GDP growth could get a boost in the third quarter of 0.5 percentage points on an annualized basis.

The U.S. economy has already benefited as foreign car companies move production to American soil, adding new jobs and boosting local economies. In May, Volkswagen opened a new plant in Tennessee, employing 1,200 production workers. Toyota plans to move production of the Corolla from Japan to Mississippi. Meanwhile, Honda has said it will speed up the transfer of work from Japan to plants in Indiana, Ohio and Alabama.

The road ahead is bumpy. Consumer confidence has slipped and employment growth has slowed. But the auto sector is far healthier than it was before the Great Recession, thanks to a painful period of restructuring. And that has put it in a position to not only navigate a stormy economy, but to give a boost to the recovery as well.

 

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Elkhart Mends as Manufacturing Rebounds

July 14, 2011 by · Leave a Comment 

Indiana’s Elkhart County became a symbol of what was wrong in the U.S. economy when President Barack Obama traveled there in February 2009 to make an appeal for more federal spending during a “deep and dire” recession.

Bloomberg reported that today, the county’s rebound is evident in the “Employment Opportunities” sign at truckmaker Utilimaster Corp., the return of laid-off workers at recreational-vehicle producer Jayco Inc., and the restoration of a downtown theater. The manufacturing community, which was losing jobs faster than anywhere in the U.S. as its unemployment rate soared to 20.3% in March 2009, is now a leader in the year-over-year drop in joblessness.

Elkhart’s turnaround, largely a result of the revival of its main industry, recreational vehicle production, reflects a nationwide strengthening in manufacturing, one of the few bright spots in a U.S. economy whose growth has slowed.

“What’s happening in Elkhart is typical of what’s happening across America,” said Morton Marcus, an Indianapolis economist and former Indiana University professor. “It’s just noticeable in Elkhart because the unemployment rate was so high.”

U.S. manufacturing unexpectedly accelerated in June as factories rebuilt inventories, a report this month by the Institute for Supply Management showed. The group’s measures of production, new orders and employment also climbed.

“With the recovery has come a rebound in RVs and autos, so now you are seeing places like Elkhart doing much better, as are towns like Toledo and Youngstown, Ohio where the auto industry is the dominant influence,” said Ken Mavland, president of ClearView Economics LLC in Pepper Pike, Ohio.

‘Worst Situation’

Motor vehicle output nationwide, which includes RVs, has climbed at a 40% annual rate per quarter on average since the recession ended in June 2009. As a result, the unemployment rate in the Elkhart County area declined to 10.1% in May.

“While we had the worst situation in the country, our recovery is probably the fastest,” said Dick Moore, the mayor of Elkhart, the largest city in the northern Indiana county. “We weren’t passive, and we weren’t stagnant.”

Elkhart has gone from the epitome of economic malaise to a standout during the recovery as much of the nation struggles with slow job growth. American employers added jobs at the slowest pace in nine months in June and the unemployment rate rose to 9.2%, sparking concern the economy is faltering.

While the Elkhart area has a long way to go to return to its pre-recession unemployment of 4.7%, it’s benefiting from economic-development efforts and a push from Washington.

700 Jobs

This year, new and expanding manufacturers aided by state and local tax abatements have made more than $66 million in capital investments and created at least 700 jobs, said Dave Ogle, director of business retention and expansion for the Elkhart County Economic Development Corp. In 2010, companies invested $96.2 million and added almost 1,800 jobs countywide.

Obama put the national spotlight on Elkhart, making it his first trip as president to push Congress to pass a stimulus plan now valued at $830 billion, mentioning the town eight times in a press conference, then returning to the area six months later to announce Energy Department grants for electric cars.

The city of Elkhart received $41 million in stimulus money, which has been used to rebuild a runway, make sewer improvements and redo roads and sidewalks. About 200 jobs resulted, said Barkley Garrett, who heads the economic-development department.

“Everyone had written us off,” said Garrett. “The things we’ve been able to do in the past two years are pretty amazing.”

RV Capital

Elkhart County, home to about 200,000 residents, makes more than 60% of the recreational vehicles sold in the U.S., a $13 billion market, and manufacturers have called back workers let go after the credit crunch in 2008 and early 2009. RV shipments dropped 33% in 2008 and another 30% in 2009, prompting a 50% workforce reduction, according to the Recreation Vehicle Industry Association (RVIA) in Reston, Virginia.

The loosening of lending and the stock market’s recovery helped fuel a 46% rise in shipments in 2010, according to RVIA data.

“All the lots down here are full of RVs again,” said Barbara Rowe, 73, recalling how her church in Nappanee opened a food pantry when unemployment skyrocketed. “They don’t mention the food pantry from the pulpit anymore.”

Lot of Uncertainty

Keystone RV Co., a Goshen-based unit of Thor Industries Inc., cut its payroll to about 2,000 workers during the recession from 3,000. It’s now back to more than 3,000.

“We’ve seen the credit come back very strong,” said Bob Martin, Keystone’s president. “It’s been nice to see many of the companies hire people back and the community come back to life.”

Jayco Inc. in Middlebury cut almost half of its 2,300 workers and has since brought back more than 600.

“We’re not striking up the band and having any parties in the street, because there is still a lot of uncertainty out there,” said marketing director Sid Johnson. “But we are pretty pleased with how things have gone.”

The racket at the Utilimaster production plant, where workers assemble truck bodies for companies, including UPS and FedEx Corp., is welcome noise to John Marshall, senior vice president of sales and marketing.

After dropping to about 400 workers from 600 during the recession, the unit of Charlotte, Michigan-based Spartan Motors Inc., soon will peak at about 930 employees.

Positions to Fill

Utilimaster hired 150 workers in the last three weeks of June. It still has 105 positions to fill at its plant in Wakarusa, about 10 miles south of Elkhart, as the company prepares to manufacture its new, lightweight Reach van, in a joint venture with Japan’s Isuzu Motors Ltd.

Customers are replacing aging fleets, and Utilimaster is in the middle of a $1.9 million plant expansion.

A tax measure Obama signed last year that included a provision allowing companies to write off 100 percent of some capital investments helped spur sales, Marshall said.

Elkhart resident Dedrick Brown, 30, was making $7 an hour as a fast-food restaurant cook until he got a job on Utilimaster’s assembly line last year. He’s now earning $13.85.

“We bought a house and we’re making our bills,” said Brown, whose wife is expecting their second child.

Kem Krest Corp., a supply-chain management company whose clients include General Motors Co. and Caterpillar Inc., is investing $6 million in a second warehouse and will double its staff to about 200 over the next five years.

Anybody Can Fail

“People are working their tails off because they are no longer thinking their industries can’t fail,” said Chief Executive Officer Amish Shah.

Some federal stimulus money will help pay interest on bonds used to finance part of an $18 million restoration of a 1,700- seat, 1924 theater, which opened in June and held two sold-out Broadway productions of Fiddler on the Roof.

Still, the Elkhart County area had more than 60,000 manufacturing jobs before the recession and has 47,300 now. While that’s up from a low of 36,900 in March 2009, wages mostly have remained stagnant. The average weekly salary unadjusted for inflation rose to $812 in the third quarter of 2010, the most recent data available, from $797 in the fourth quarter of 2007.

Moore, Elkhart’s mayor, estimates it could take 12 years for the city to see employment peak again as it looks to diversify beyond the RV business.

“We’ve still got a lot of empty factories and warehouses that we need to get filled,” he said. “We’re not down and out.”

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Bernanke: Recovery’s Pace to Quicken Soon

July 13, 2011 by · 1 Comment 

Federal Reserve Chairman Ben Bernanke, facing an economy and job market that are growing at a snail’s pace, on Wednesday (July 13) stuck to the view that temporary factors were behind the recent slowdown and that the recovery would pick up speed in the coming months.

The Los Angeles Times reported that in his semiannual report to Congress on the economy and monetary policy, the Fed chairman said that the “apparent stabilization in the prices of oil and other commodities should ease the pressure on household budgets.” He added that the economy should also get a lift this summer as car manufacturers increase production after cutting back because of disruptions from the earthquake and tsunami in Japan.

The anticipated pickups in economic activity and job creation, together with the expected easing of price pressures, “should bolster real household income, confidence, and spending in the medium run,” he said in prepared remarks to the House Financial Services Committee.

At the same time, Bernanke remained cautious about the prospects ahead, citing a number of headwinds, including still-high food and energy prices, the depressed housing market, limited credit for some consumers and small businesses, and the belt-tightening at all levels of government.

And the Fed chair said he expected no quick improvement in the stubbornly weak job market. The nation’s unemployment rate, at 8.8% in March, has risen in subsequent months, to 9.2% last month. And job creation, which had accelerated earlier this year, ground to a near halt in the last two months.

“The jobless rate will decline — albeit only slowly — toward its longer-term normal level,” he said, noting the most recent view of Fed officials that unemployment would likely remain near 9% at the end of this year and still in the 7% to 7.5% range at the end of 2013.

Bernanke’s statement was to be followed by an exchange with lawmakers, who were expected to focus on the nation’s struggles with the federal deficit and job growth. The Fed chairman has stated in the past that Congress needs to develop a budget that would narrow the deficit over the long haul but not make drastic, immediate cuts that could hurt the recovery.

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Indiana Manufacturing Aids Economic Rally

June 21, 2011 by · Leave a Comment 

The economic recovery may have stalled in parts of the South and West hit hard by the housing bubble, but Rust Belt states, buoyed by a manufacturing comeback, have seen a steady decline in their jobless rates over the last year.

According to a report from McClatchey Newspapers, of the 10 states where unemployment rates dipped the most from May 2010 to May 2011, Rust Belt states — Michigan, Indiana, Ohio, Pennsylvania and Illinois — account for half, according to Labor Department figures. Indiana is the manufacturing hub for recreational vehicles in the U.S.

Metropolitan areas in the five Rust Belt states accounted for 30 of the top 34 declines in regional unemployment rates since last year, as well.

While these industrial Midwest states and towns have made the biggest strides in reducing their jobless rates, their progress is limited. Many had some of the nation’s highest jobless rates during the recession, so their declines reflect not only more people finding jobs, but also the labor-market loss of older manufacturing workers who gave up the job search.

A recent national survey of 18,000 employers by the work force consulting company ManpowerGroup found that 20% plan to hire in the third quarter of this year, while only 8% expect to cut jobs.

But a whopping 69% expect to make no changes at all in their payrolls, suggesting “a level of caution not seen among employers in the last 30 years of data,” said a statement by Jonas Prising, ManpowerGroup president of the Americas. “This fact, along with many clouds still on the economic horizon, may explain the tepid labor market growth we have seen so far.”

Ironically, it’s the long-troubled manufacturing sector that’s fueling the nation’s anemic economic recovery. For years, industrial decline and globalization eliminated thousands of well-paying manufacturing jobs in the industrial Midwest. The recession doubled the pain as demand for manufactured goods plummeted, driving even more people out of work.

But as America’s auto industry rebounds and export demand for industrial and agricultural equipment remains strong, Rust Belt states are slowly coming back.

“That’s a huge change from ‘06, ‘07 and ‘08, when the automobile industry was in big trouble and shrinking,” said Steven Cochrane, the managing director of Moody’s Analytics in West Chester, Pa.

Cochrane said the excess of factory and building space, a skilled labor force and lower labor costs due to union concessions had made the Rust Belt attractive to companies looking to expand. “It’s no longer a no-brainer to look elsewhere,” he said.

In Elkhart, Ind., where production of recreational vehicles accounts for about half of the area’s economy, unemployment spiked at 18.9% in March 2009.

But over the last year, RV manufacturers and their suppliers began adding workers and hours in Elkhart, which posted the nation’s largest one-year decline in its area jobless rate, going from 14.1% in April 2010 to 10.1% in April 2011.

An electric car manufacturer from Norway, THINK, opened its North American assembly plant in Elkhart last year and plans to build 2,500 vehicles this year. The plant, in a former RV parts factory that went out of business, has more than 100 employees and is expected to create more than 400 area jobs by 2013.

“Elkhart hasn’t fully recovered by any stretch, but the rate of change” is promising, said Jim Diffley, senior director and chief regional economist at IHS Global Insight in Philadelphia.

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Slow Trickle Down for Elkhart County Recovery

March 14, 2011 by · Leave a Comment 

Editor’s Note: The following story about the economic recovery in Elkhart County, Ind., was written by Tom Coyne of the Associated Press and appeared in several newspapers, including The Goshen News.

John Sinning has been looking for work since he was laid off from his job as a manufacturing engineer two years ago. Insurance executive Joe Christophel has been without steady work since October 2009.

Both see reports that the economy is improving, and they’ve watched the unemployment rate in Elkhart County drop from 18.9% in March 2009 to 12.2% in January. But like so many others across the country, Sinning and Christophel say the fledgling recovery hasn’t trickled down to them yet.

“I do see more positions out there that are in areas where I feel I have some qualifications for. That’s probably about the most hopeful thing I see,” Christophel said. “But it’s still very difficult to actually get interviews.”

Nearly two years after the recession’s official end, the road to recovery is still a slow climb in places like northern Indiana’s Elkhart County, which President Barack Obama held up during his campaign and in two postelection visits as a symbol of the nation’s economic woes. Even as Indiana officials herald a drop in the statewide jobless rate to 9.1%, its lowest since January 2009, many in this manufacturing-dependent county are still grasping for the opportunities Obama said were the key to economic recovery.

Aid groups say demand for help is on the rise, and economists say the flickers of life in the economy are still too weak to compensate for all the jobs lost — many when the recreational vehicle industry collapsed.

“Those who have been able to find work in many cases haven’t been able to get back to the sorts of work or the level of work they were doing before. It’s just a sign that the recovery has been slow to create new jobs to regain the millions that were lost,” said Jerry Conover, director of the Indiana Business Research Center at Indiana University’s Kelley School of Business.

“It’s going to be uncomfortable for lots of folks to deal with that reality in the coming years,” he said.

That uncomfortable reality is evident each week when a support group for the unemployed called People Between Jobs convenes in Elkhart.

Pam Duncan runs the meetings, working at times as a cheerleader and others as a career counselor for the mostly white-collar workers who gather.

The meetings start with a prayer and the reading of blessings, then Duncan asks how many of those present applied for jobs in the past week and had job interviews. During a recent meeting that Sinning attended, all seven present had applied for jobs, and four had interviews.

None had job offers.

Sinning, 62, who was laid off from his job at a company that makes products for motorhomes, said he has applied for jobs in management and as a journeyman tool and die maker. He’s getting by on his savings and an antique and art business that he started while he continues his hunt.

“This stuff is OK, but it’s just so slow,” he said.

Duncan says more jobs are cropping up, but it’s not all good news.

“What I have found is that people who are getting jobs are getting not as many hours and not as much money,” she said.

Ed Swartley, executive director of The Window, a community volunteer center that offers free clothes and food to those in need, said the charity saw the number of meals it serves each month double to about 400 last August.

“Last year was our toughest year, and I don’t see this year changing,” he said.

Swartley estimates about 65% to 70% of the people who visit The Window have been laid off or have jobs that don’t pay enough to make ends meet. Before August, those seeking help primarily were people living on the edge of poverty to begin with. Now, more people from the middle class are seeking assistance, he said.

David Schrock-Shenk, who founded a grass-roots group called Elkhart County Works Together to help the unemployed in the Goshen area, thinks things are getting worse for many residents.

“Two years in, we’re starting to see a new victim of that economic recession at a time when people’s attention goes to other places. People are much closer to the edge. The margin is gone. The emotional resilience is gone,” he said.

Christophel, 63, who has 27 years’ experience in the insurance industry, isn’t giving up.

He sets up his computer along the wall of The Electric Brew cafe in downtown Goshen most weekday mornings and starts looking for work.

Christophel has been getting by on unemployment and the money his wife earns as a school social worker while he searches for full-time work.

If a full-time position doesn’t arise, he hopes to get off unemployment by cobbling together part-time jobs. He already has one lined up working one day a week with the Mennonite Church USA and hopes to land another one-day-a-week job with another church group soon. The two would eliminate the need to collect unemployment, and that alone would be a victory, he said.

“I’d really like to get off unemployment,” he said. “If I can move on and move off that, it feels positive.”

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Cummins Inc. Recalling 400 Workers to Indiana Plant

July 9, 2009 by · Leave a Comment 

cummins_logoCummins Inc. is recalling 400 laid-off workers as it resumes production at a Columbus, Ind., factory, but nearly 300 people lost their jobs when an auto parts company idled a plant in nearby Shelbyville.

Cummins is preparing to resume production of the Dodge Ram engine at its Columbus MidRange Engine Plant with one shift beginning July 13, according to the Associated Press. The company shut down the plant and laid off 720 employees in May after Chrysler stopped vehicle production during its bankruptcy proceedings.

Cummins spokesman Mark Land said the plant would produce engines for the 2009 model Ram through mid-August, but that it would be idled again until Chrysler starts building the truck’s 2010 model. He said workers were expected to be called back again in October.

Land said Cummins has “solid commitments” from Chrysler for the 2010 Dodge Ram.

“We were confident,” Land said of continuing business with Chrysler. “But it’s nice to see that it’s really happening.”

Developments were less encouraging at the Meridian Automotive Systems factory in Shelbyville, where the company told city officials Thursday (July 2)  that it was closing the plant for an indefinite period.

The announcement came less than a month after Meridian announced it planned to lay off 198 workers from the plant in stages over the summer.

The Allen Park, Mich.-based company said then that the layoffs were necessary because it had lost a major customer, which it did not identify. Meridian has made various parts for several automotive companies, including General Motors.

Shelbyville Mayor Scott Furgeson said the new announcement superseded Meridian’s previous schedule of job cuts.

“I don’t know Meridian’s position as a company, so I don’t know their long-term plan with this facility,” Ferguson said. “So hopefully they will continue to keep the plant in their long-term plans and will someday reopen it.”

Auto industry layoffs across the state helped push Indiana’s unemployment rate to 10.6% in May – double from the 5.3% of May 2008 and the state’s highest jobless rate since 1983.

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Hoosier RV Manufacturers Report Business Upturn

July 9, 2009 by · Leave a Comment 

The RV industry in northern indiana is beginning to breath a sigh of relief, however hesitantly, according to The Goshen (Ind.) News.

Shipments began a turnaround in January, after dropping from a high of 31,400 units in April 2008 to only 5,600 units in December. That turnaround has not gone unnoticed. Shipments totaled 13,300 in April.

“We’re going through a period right now of relatively good order backlog, which is a significant improvement over what it was three months ago,” said Sid Johnson, director of marketing at Jayco Inc., Middlebury, Ind. “In fact, in the last 60 days, in terms of order intake, we’re at a good 50% of what we were doing last year at this time.”

A recent release from the company noted positive dealer attitudes at their “Homecoming” event held last week. And although the company’s RVs are constructed by a 1,200-employee work force, approximately 55% of its size a year ago, new products will be coming out. Johnson pointed to a new product line that the company will introduce near the beginning of the new model year.

“This year is going to continue to be challenging, but I think everyone, at least everyone at Jayco, is enthusiastic about our prospects for next year starting this fall and winter,” he said. “We’re spending a lot of time on product development and aggressive promotion programs throughout North America.”

He added, though, that it’s too early to be counting any chickens.

“There’s no doubt recovery has begun in the industry and the economy as a whole,” Johnson said, “but the bottom line is we’re not out of the woods yet.”

At Keystone RV Co., in Goshen, demeanors are also bright.

“We definitely saw things pick up about six weeks ago, and we’re seeing it from retail orders on our dealers’ lots,” Bob Martin, Keystone’s executive vice president and chief operating officer, said.

Martin said everything was shut down this week to give their employees a well-deserved break. Next week, four additional plants will be opening back up.

“We definitely got busy, and it happened quickly,” he said.

So far this year, about 150 employees have been rehired due to increased production rates. Where their dealers were having problems selling units early in the year, they are now beginning to sell out.

“It’s been a good feeling and we’ve been blessed this summer,” Martin said. “Earlier this spring, we didn’t know what to expect, so this is a very welcome event for our company and our community.”

He pointed out that company officials are still watching out for the rest of the year, as nobody in the industry can accurately predict what could happen when the weather turns colder and the prime RVing season passes.

“We really don’t know what to expect going into the fall,” Martin said. “Much of what hindered us last year were banks and retail and wholesale financing, and that’s the X-factor we don’t know.”

Local RV dealerships are feeling the turnaround as well.

In Shipshewana, Wana RV & Engine Center President Gary Martin is excited.

“Our numbers for June are much, much better than what they were last year, and we’re actually starting to catch back up,” Miller said.

Like the manufacturers, he has noticed business picking up recently in particular.

“It’s just been the last four weeks that we have really been hopping that we can’t keep up, which is a good thing,” he said. “Fifth-wheel, travel trailers both are good. It doesn’t matter if they’re lightweight or bigger units. Sales are up right now.”

Ewing’s Outpost RV Sales Manager Dennis Johnson has seen much the same at their dealership.

“As of today here, we’ve had more traffic than we’ve had for a while,” he said. “Long story short, we’ve done actually pretty well.”

According to Dennis Johnson, they haven’t had all the problems some dealerships have seen, but times have still been tough. He said their business has shifted but stayed relatively constant since the beginning of the year.

“People’s sights have dropped down some as far as dollar amount that they want to spend and the size of the unit they want to purchase. Larger, higher-priced units are not selling as well,” Johnson said. “Over the last couple of weeks that’s changed some, we’re starting back in again with the bigger units.”

They are now up to about one sale each day, or between 30 and 35 units each month.

“We can’t complain,” Dennis Johnson said. “We’re still here, and that’s one thing a lot of people can’t say.”

He spoke confidently when asked about the future of the industry.

“I think, from everything I hear, there’s going to be a little lull here for a while yet,” Johnson said. “But I think it will come back and come back a little bit stronger than before because of pent-up demand.”

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