Elkhart County, center of the nation’s RV industry, retained the ranking as having the highest jobless rate in Indiana in October, the state’s department of workforce development reported today (Nov. 23).
The county’s rate was 12.9%.
Meanwhile, the cities of Elkhart and Goshen remained Nos. 1 and 3 with the highest municipal rates. Elkhart’s was 15.1%, up from 14.9% in September, while Goshen’s was 13.8%, up from 13.2% in September.
The jobless rate in Elkhart County, Ind., fell to 13.4% in August, from 13.9% in July, the Indiana Department of Workforce Development (IDWD) reported today (Sept. 21).
Elkhart County’s rate remained the second highest in the state.
Meanwhile, the jobless rates for the county’s two largest cities, Elkhart and Goshen, which depend upon jobs in the RV industry, were 15.3% and 13.7%, respectively.
Indiana’s unemployment rate for August has remained flat at 10.2%.
Elkhart County’s jobless rate stood at 13.7% in May, again leading the state, the Indiana Department of Workforce Development (IDWD)reported today (June 18).
The state’s May unemployment held at 10%, unchanged from April. The IDWD said private sector employers throughout the state recorded 6,300 additional jobs in May.
Elkhart County’s jobless rate fell 1.1 percentage points in April, to 14.1%, but it remained the highest rate in Indiana, the Indiana Department of Workforce Development reported today (May 21).
It has fallen nearly 5 percentage points since standing at 18.9% in April 2009.
The cities of Elkhart and Goshen stood at No. 1 and No. 3, respectively, in terms of the highest rates for cities in the state. Their rates were 16.6% and 13.1%, respectively.
The county’s economy is highly dependent upon the RV industry, which produces nearly 70% of the nation’s RVs.
Indiana’s state rate was 10% in April, up from 9.9% in March.
The jobless rate for Elkhart County, Ind., fell to 15.2% in March, down slightly from 15.5% in February and 15.6% in January, the Indiana Department of Workforce Development reported today (April 16). However, the county, which relies heavily on the RV industry for jobs, retained the highest jobless rate in the state.
Indiana’s preliminary seasonally-adjusted unemployment rate for March 2010 increased by 0.1% to 9.9%, but the number of Hoosier jobs increased by 16,600. That is the largest over-the-month employment increase since September 2005. The monthly increase in the unemployment rate is not considered statistically significant.
“Ten percent of all jobs added in the U.S. (162,000) in March were located in Indiana, but more Hoosiers returned to the work force last month, impacting the rate,” said Teresa Voors, Commissioner of the Indiana Department of Workforce Development.
Elkhart County retained the dubious title of having the highest jobless rate in the state of Indiana in February.
The county’s rate stood at 15.5%, about the same as January’s 15.6%, the Department of Workforce Development reported today (March 26).
Rates for the cities of Elkhart and Goshen also topped the charts, at 17.1% and 14.4%, respectively.
Unemployment trends mimic the path of the RV industry which is heavily concentrated in Elkhart County.
The state’s unemployment rate for February inched up 0.1% to 9.8%.
Workforce Development Commissioner Teresa Voors said there’s some positive news from the report.
“Indiana saw a small increase in total employment and a large increase in professional and business services, a sector which includes temporary staffing and often predicts future job growth.” Indiana is also the only state among its neighbors to report an unemployment rate below 10%.
Elkhart County held onto the top spot in terms of joblessness in the state of Indiana in January, the state’s Department of Workforce Development reported today (march 10).
Despite recent hirings in the RV industry, the county’s rate remained high at 15.6%.
Meanwhile, Indiana’s preliminary seasonally-adjusted unemployment rate for January 2010 did not change from the revised December 2009 rate of 9.7% (-0.2 percent). Indiana matched the national rate.
“Similar to the rest of the nation, Indiana isn’t seeing much change right now,” said Teresa Voors, Commissioner of the Indiana Department of Workforce Development. “Indiana’s unemployment rate appears to be holding relatively stable based on the slowing of job losses.”
Elkhart County, Ind., which remains the hub of the RV industry despite the industry downturn, was the top destination for new corporate investment in 2009 among metropolitan areas with populations less than 200,000, according to data tracked in Conway Data Inc.’s New Plant Database.
In the state category, Ohio ranked first for the fourth straight year and Indiana ranked 10th.
Conway Data published the 2009 results to its annual Governor’s Cup awards in Site Selection, a corporate real estate and economic development magazine.
Elkhart County was credited with 17 major investment projects in 2009 to lead the small metro area list. The greater New York City area led all areas with 215 investments. Dayton, Ohio, led the areas of between 200,000 and 1 million population with 46 major investments.
“Elkhart is once again in the national spotlight, but this time as a top location for new business investment last year,” said Mitch Roob, secretary of commerce and CEO of the Indiana Economic Development Corp (IEDC), in a news release. “Indiana’s low-cost business environment is a key differentiator that has attracted many companies to our state in the midst of a competitive economy.”
Governor’s Cup winners are selected based on the number of new corporate location projects in each state and metropolitan area that meet at least one of three criteria:
- Involve a capital investment of at least $1 million.
- Create at least 50 new jobs.
- Add at least 20,000 square feet of new floor area.
“The Governor’s Cup Award is a true honor for Elkhart County. The economic crisis has positioned us on the forefront of national and international news. This award is known to be a leading indicator of future growth and prosperity for a region,” said Dorinda Heiden-Guss, president of the Economic Development Corp. of Elkhart County.
Site Selection, a 56-year-old Atlanta-based magazine, has conducted the Governor’s Cup annually since 1978. The full report can be found at www.siteselection.com.
Created by Gov. Mitch Daniels in 2005 to replace the former Department of Commerce, the IEDC is governed by a 12-member board chaired by Daniels. For more information about IEDC, visit www.iedc.in.gov.
Elkhart County in northern Indiana has been designated as a ”recovery zone” under the American Recovery and Reinvestment Act (ARRA).
County commissioners Monday approved a resolution that gives Elkhart County access to $75 million in low-interest bonds to jumpstart economic recovery and job creation, according to the Goshen News
As defined by the ARRA, a recovery zone is any area having significant levels of poverty, unemployment, rates of home foreclosures, or overall general distress — all of which currently apply to Elkhart County, the center of RV production in the U.S.
Through the new designation, local governmental units and certain private entities within Elkhart County will now have access to the bonds.
Once issued, such bonds would receive a 45% subsidy of their interest cost from the federal government, which will result in significant interest cost savings for local governments and select private businesses.
In order to validate the new designation, the commissioners recently compiled a factual report outlining the various ways Elkhart County meets the qualifications for a recovery zone.
Findings from the report, which were released Monday, concluded the following:
• The county has experienced significant poverty as demonstrated by unemployment, foreclosures, failed businesses, bankruptcies, vacant properties, demands on area food pantries, and other financial hardships experienced by families.
• The county has experienced significant unemployment as demonstrated by unemployment rates leading the state and receiving local, state and national attention.
• The county has experienced a significant rate of home foreclosures as demonstrated by foreclosure rates meeting or exceeding state and national averages.
• The county has significant general distress as demonstrated by all of the above circumstances.
According to County Attorney Craig Buche, access to the program’s $75 million in low-interest bonding authority will be divided into two categories, or “caps”, with approximately $30 million designated for use by local governmental units under the Recovery Zone Cap, and the remaining $45 million designated for us by county-approved private entities under the Recovery Zone Facility Cap.
While no capital projects have yet been pegged for receipt of the low-interest bonding authority, the commissioners are encouraging all cities, towns and private businesses within Elkhart County who have economic development capital projects in the works to apply through the commissioner’s office.
The RV manufacturing hub of Elkhart County regained the ominous recognition of having the highest unemployment rate in Indiana in July.
The county’s jobless rate last month was 16.7%, according to the Associated Press.
Howard County, which had the highest rate in the state for several months, fell to 10th with a rate of 14.7%.
The Indiana Department of Workforce Development said the state unemployment rate for July was 10.6%, essentially unchanged from 10.7% in June. Commissioner Teresa Voors said the report shows the impact of the auto industry emerging from bankruptcy and workers returning from summer furloughs. She adds large increases in manufacturing employment and gains in cities like Kokomo in Howard County are a “direct result of Hoosier auto workers going back to work.”
Elkhart County’s unemployment rate fell in June, according to figures released Friday (July 17) from the Indiana Department of Workforce Development.
Elkhart County’s rate dropped from 17.5% in May to 16.8% in June.
The city of Elkhart’s unemployment rate also dropped, from 19.2% in May to 18.7% in June.
The drop in Elkhart’s unemployment rate could mean a couple of things. One possibility is that the labor force is shrinking. Some people have found work in areas such as farming or simply retired, said Michael Hicks, director of the center for business and economic research at Ball State University.
Another possibility is that workers are finding work with smaller businesses. Hicks said small firms — those with maybe 30 to 50 workers — are playing a larger role in manufacturing. Elkhart has gotten a lot of national attention lately, Hicks said, and its manufacturing history holds a lot of appeal to companies looking to set up shop in the Midwest.
Scott Tapley, vice president/portfolio manager with 1st Source Bank, said he couldn’t comment about new, smaller businesses coming to town. But he wouldn’t be surprised if they started to spring up.
Tapley said Elkhart is an entrepreneurial area full of creative thinkers. And the creation of small businesses helps end recessions, he said.
Elkhart County has posted unemployment figures in the double digits for 10 months. Hicks said the fallout from such figures can be hard on a community. Social service agencies see a lot of stress as contributions are down and needs rise, he said.
Hicks also said there’s a risk of “brain drain” with a prolonged recession. As young people graduate college they may be less apt to want to return to a community with a high unemployment rate.
But he said it’s doubtful Elkhart will push too many people away. Elkhart may have been one of the first areas to head into the recession, he said, but only by a few months.
He said it’s also too soon to tell whether the stimulus package is doing anything to boost the economy. He said it would take at least six months from when the package was passed at the end of February to see any impact.
“Anybody that thought that this was going to have an effect in less than six months other than on the confidence that the economy would eventually recover was living in Neverland,” Hicks said.
In light of the current condition of the Elkhart (Ind.) County economy, Newmar Inc., Nappenee, Ind., will hold its 24th Annual International Kountry Klub Rally Aug. 3-8 at the Elkhart County 4-H Fairgrounds rather than in Perry, Ga., as originally planned.
Established in 1985, the Newmar Kountry Klub is an exclusive club for owners of Newmar products. Currently, membership exceeds 3,500 members.
“Newmar’s decision to move the rally made sense given the current economic state the county is in,” said Barney Barnett, Newmar International Kountry Klub director, in a press release. “Newmar is located in Elkhart County and we wanted to do something to help support local business and drive traffic to the county.”
The club has over 360 confirmed reservations and expects to end up with between 500 and 600 units participating in the rally at the fairgrounds.
“Surprisingly reservations are coming in ahead of where we have been in years past,” said Barnett. “We are hoping this is a good sign and that our expectations will be exceeded.”
Barnett and his staff have been working with local vendors to plan several of the events and classes that will take place during the rally. One project of particular interest has been tote bags the club will be using as welcome gifts.
The bags are being made in Goshen by former RV workers who have been laid off as a result of the RV industry downturn. The fabric being used to make the bags has been purchased or donated from scrap material from RV manufacturers and suppliers who have gone out of business or who have had to cut back in production.
The making of these bags has created new jobs and is gaining popularity. Former presidential candidate Mike Huckabee received one during his recent visit to Elkhart County. All of the items in the bags are from local businesses.
Along with Newmar factory tours, several other local tours have been arranged for rally participants, including the Nappanee Amish Acres Arts and Crafts Festival, A Foodies Delight Tour in Amish Country, American Countryside Farmers Market Dinner and Theater and in-home Amish meals.
“Newmar is looking forward to this year’s rally,” said Matthew Miller, Newmar president and chairman of the Klub’s Board of Directors. “We are confident the RV industry will turn around and we wanted to get together with our Klub members close to home for a week of fellowship and to show our loyal owners that Newmar and Elkhart County are open for business.”
Editor’s Note: MSNBC.com is conducting a year-long study of Elkhart, Ind. This 2,300-word story, which appeared in The Elkhart Truth, is the latest installment in a series of stories from that project.
In the same way that people might speculate about a couple that could be heading for divorce, business leaders in Elkhart, Ind., sometimes talked about what could happen if the recreational vehicle industry took a serious turn for the worse.
They’d seen it happen before in the early 1970s with the energy crisis and in other recessions since. But this was back a few years ago, when business was booming, and such talk seemed more theoretical than practical, as you might discuss the need to get a new roof, eventually.
“Yeah, there may be a desire to implement change, or diversify,” said Brian Gildea, economic development director for the city of Elkhart. “But when it’s not broken, the impetus to change is not there.”
Now the so-called “RV Capital of the World” is seeing a scenario that even the most pessimistic didn’t think would come to pass.
A season of high gas prices, a deep and lasting recession, a drop in home and investment values and a severe shortage of credit have conspired to decimate the RV industry, which officials say once accounted for as many as one in four jobs here.
The unemployment rate in Elkhart County hit 18.8% as of March, up from just 5.8% a year earlier. That was the largest jobless rate increase of any metropolitan area in the country.
Many local companies, including RV makers and their vast network of small, independent suppliers, have either cut back or gone out of business entirely, leaving the community with millions of square feet worth of vacant manufacturing buildings and thousands of unemployed workers.
‘Diversification is easy to talk about …’
The hard fall for Elkhart’s economy shows the dangers of depending too heavily on one industry for economic health, but also the difficulties of diversifying away from the main engine of a community’s economic activity. As Elkhart struggles to recover, residents are seeing firsthand the monumental task of clawing back from such a massive economic hit at a time when virtually every city in the nation is also suffering from the recession.
“Diversification is easy to talk about, but it’s not easy to bring about,” said Bill Johnson, who several years ago led an effort called the Horizon Project that aimed, in part, to draw a more diverse group of businesses to Elkhart County.
Experts point to success stories such as Akron, Ohio, which was able to create a niche in the polymer industry when the rubber industry began to decline. But they also offer up cautionary tales such as Gary, Ind., which has struggled for decades since the heyday of the steel mills.
The hard truth, many say, is that making an economy less reliant on one major industry can take a decade or more. Ned Hill, dean of the Levin College of Urban Affairs at Cleveland State University, said success often depends on politicians and business leaders who can help a community grow while not fighting too hard against market forces.
“The No. 1 rule is: Don’t allow yourselves to be a victim. You don’t want to do what Youngstown did and what Philadelphia did and say, ‘It’s always come back, it’s going to come back one more time,'” Hill said.
Youngstown, Ohio, has taken years to recover from the decline in steel, while Hill faults Philadelphia-area politicians for spending too much time and money battling cutbacks at its Naval Shipyard, which once employed thousands.
‘They will come back’
Many in Elkhart insist that the RV industry will revive, citing the allure of the open road and desire to be in the outdoors that stokes long-term demand. But even the most optimistic concede this recession has been deeper and more troubling than past downturns. If the RV industry emerges, it may look different than it did during the boom times just a few years ago.
“We don’t have an industry that’s no longer viable,” said Gildea, the Elkhart economic development director. “They will come back. It’s just a question of at what level.”
That leaves Elkhart, along with countless other communities across the Midwest, struggling with the question of what other businesses they can attract to the area. The additional conundrum for Elkhart – and many other communities in Indiana, Michigan and Ohio – is that they have continued to rely mainly on manufacturing for their economic well-being rather than transitioning to more service-oriented work.
Manufacturing accounted for about half of the Elkhart area’s jobs during the boom times. With the recession, that figure has dropped to around 43%, according to state statistics, still well above the national average.
“There’s a lot of diversity in this county in the sense of manufacturing. But that’s the issue: manufacturing,” said Richard Lavers, CEO of Coachmen Industries Inc., an Elkhart company that recently shed its RV business to concentrate mainly on modular homes.
“Is that a good or a bad thing? You play to your strengths,” Lavers said. “Unfortunately, manufacturing is becoming rarer and rarer and rarer.”
Even those who have long touted the importance of technology to the region concede that it would be hard to attract high-tech, white-collar jobs. Many manufacturing workers here have been able to make a very good living without a college education or advanced training. The area’s location, on a major interstate near the middle of the country, combined with its vast landscape of low-slung manufacturing facilities, make it ideal for such work.
“I see Elkhart remaining a primary manufacturing economy for the foreseeable future,” said Jim Walsh, vice president of the North Central Indiana Business Assistance Center. “I think the kind of manufacturing is going to change, (but) we’ve always prided ourselves: We make stuff.”
Walsh – who regularly runs workshops helping manufacturing operations become more efficient – still hopes technology will play a role in the area’s recovery.
“We’re still building things like we were 50 years ago, and we’re not going to last,” he said.
Elkhart’s woes may be more extreme than others around the country, but they are not unique. John Stafford, director of the Community Research Institute at Indiana University-Purdue Fort Wayne, said he’s watching many communities struggle with whether they can leave their manufacturing roots to evolve into more of a service economy.
“Every one of us is looking to answer that question,” he said.
Other Midwestern cities including East Peoria, Ill., a manufacturing hub for struggling Caterpillar, and Flint, Mich., once a mecca for auto manufacturing, are wrestling with a similar plight.
Diversity faded over the years
While it’s easy to judge such cities in hindsight, it can be almost irrestible to hitch the civic wagon to a single industrial star in good times.
“The reality is that if you’ve got an industry that’s paying good wages and good returns, the best bet is to go start working for them,” said Hill, the Cleveland State professor.
It also hadn’t always been this way in Elkhart. When Angie Recchio was growing up here, she figured she’d have her choice of three industries for a career: pharmaceuticals, band instruments and the RV business.
But by the time Recchio had grown up, earned a college degree and returned to her hometown, her choices had narrowed. The pharmaceutical and band instrument companies that were once such a major presence had mostly been sold to larger companies, who in turn sent thousands of those white-collar and factory jobs elsewhere.
For her and her peers, it seemed like the options were to go into the RV industry or get a service job, perhaps at a car dealership or restaurant.
Recchio, 33, chose the RV industry. Now she works as a sales representative for Valley Screen Process Co., which makes decals, mostly for RVs. She believes the RV industry will revive but says the downturn has prompted her company to look more aggressively for other customers.
“Maybe it’s a wake-up call,” she said.
‘Way too deep in one industry’
Some in the community have been working for years to recruit new industries.
“There were a lot of people who lived here who said, ‘Hey, we’re getting way too deep in our one industry,'” said Tom Stark, a vice president at Lake City Bank in nearby Goshen.
In part to address that concern, county leaders formed an Economic Development Corp. in 2000. A few years later, the community began work on the Horizon Project, an ambitious effort to expand educational opportunities in the county, deal with infrastructure problems and grow the county’s economic base.
But they hit roadblocks.
Stark, a member of the EDC board, said many businesses were reluctant to come to Elkhart County because the bustling RV industry kept the unemployment rate extremely low, making it hard to find workers.
For the same reason, some in the RV industry were unhappy with diversification efforts, said John Letherman, president of the Elkhart County Council.
“You bring in more companies, that just makes the labor pool that much smaller,” Letherman said.
Johnson, who headed the Horizon Project after selling his own rubber business, also said some companies were looking for a more highly skilled workforce than Elkhart had to offer. But over the years, many of the other companies that had once employed engineers, chemists and other highly skilled workers had left town, and the RV industry does not generally require those types of advanced skills.
Some workers are heading back to the classroom now. About 600 former RV workers have enrolled in retraining programs through the area’s Ivy Tech Community College, where overall enrollment is up. But efforts to educate a workforce can take years.
“Retraining’s a wonderful thing, but it’s not going to happen overnight,” Johnson said.
Reasons for optimism?
Despite the difficulties, community leaders see reasons to be optimistic. People at the EDC and the city of Elkhart say they are fielding hundreds of calls from people inquiring about doing business in the county. That’s thanks in part to President Barack Obama, who drew national attention to Elkhart’s plight in his three appearances there.
Still, with the rest of the nation also in recession, it’s tough to say when, or if, that attention will translate into new business and jobs. The county also is facing stiff competition from other communities hungry for new industry.
Boosters say Elkhart has several competitive edges. Where once potential businesses fretted about not finding enough workers in Elkhart, now the county can point to a willing workforce that is accustomed to hard, physical labor in the RV factories, which often pay according to production.
And they say Elkhart has a long history of entrepreneurship, pointing to the many businesses that have sprung up in recent years to supply the RV business. The community, they say, is a resilient one.
“We’ve been in a hole, but we’re trying to look up and see out of it,” said Dorinda Heiden-Guss, head of the county’s EDC.
Elkhart officials say their community could be a hub for other business, such as storage and distribution facilities. And many are hoping that a recent decision to locate a major nanotechnology research facility in nearby South Bend eventually will bring work to Elkhart.
Robert Dunn, managing director of that facility, the Midwest Institute for Nanoelectronics Discovery, said there is potential for work there to lead to manufacturing in Elkhart, but not for three to seven years.
Meanwhile, many small businesses that have supplied the RV industry also are seeking to diversify.
Promens’ Elkhart facility once did the bulk of its plastics processing for the RV industry. Now, the bulk of the work is for other industries. But Jack Welter, vice president of Roto North America, a division of Promens, said that is largely because the company closed two other factories elsewhere and shifted that work to the Elkhart facility.
“I don’t want to take too much credit on diversification,” he said.
When Kirk Veer started seeing business slip at American Stonecast Products, which supplies sinks to the RV industry, he tried to get retailers interested in his products. But Veer, who is president of the small company, said he quickly found he didn’t have enough of a product line to interest big stores.
Now, instead of pursuing business outside the RV industry, he’s hoping to stay afloat in part by adding lightweight countertops and tabletops to the roster of things he supplies to RV makers.
Many businesses interconnected
Another issue for communities tied primarily to one industry is that even other companies in town are often linked to the primary industry. Goshen Coach, a division of Thor Industries Inc. that makes small buses, is by some measures one of the bright spots in Elkhart’s struggling economy.
So far, the manufacturing facility has lost employees only through attrition, said Troy Snyder, Goshen Coach’s president. Executives hope federal stimulus money will help business, because local governments will have more money to buy vehicles.
But Goshen Coach relies on about 300 suppliers, including many in Elkhart County that also supply the RV industry. About a dozen of those suppliers have gone out of business because of the RV industry’s troubles, leaving the bus company to find new suppliers.
The company gets its chassis primarily from troubled U.S. carmakers GM and Ford. Because both of those companies are periodically shutting down their manufacturing lines to save money, Snyder said the company has been forced to keep more chassis on hand than it would like so it doesn’t get caught without the much-needed base for its buses.
On the plus side, many in the RV business say they are starting to feel hopeful that things won’t get worse. They talk of a good week here or there, and say the RV industry typically picks up in the spring and summer months.
“We think we’re at a point where we can ride it – we’ve hit bottom,” said Derald Bontrager, president and chief operating officer of the RV company Jayco Inc.
Indiana’s unemployment rate grew to 10% in March, keeping the state’s jobless rate at the highest level since the recession of the early 1980s.
Seasonally adjusted preliminary numbers released today (April 17) show that nearly 340,000 residents were looking for work in March – nearly double the number from the same time a year ago. March’s jobless rate of 10% is up from February’s rate of 9.4%, according to Associated Press.
Indiana’s unemployment rate was last at 10% in November 1983. State officials say continued declines in the auto industry were partly to blame for March’s increased rate.
“Uncertainty in the manufacturing sector, particularly automotive, is causing a ripple effect in Indiana,” said Teresa Voors, commissioner of the Indiana Department of Workforce Development. “We saw employment declines in auto manufacturing, transportation and logistics as Indiana plants produce, assemble, transport and warehouse fewer products.”
LaGrange County had the state’s highest unemployment rate, at 18.9%. That slightly topped Elkhart County, which had a jobless rate of 18.8% and for months has had the dubious distinction of being the epicenter of the state’s unemployment problems. The county rates are not seasonally adjusted.
Elkhart Mayor Dick Moore said the economies of the LaGrange and Elkhart counties both rely on the troubled recreational vehicle industry.
“They’re very much aligned and dependent upon the same type of manufacturing,” Moore said.
Most counties in northern Indiana – an area hit hard by job cuts and plant closures in the RV industry – had rates above the state average.
Ted and Kay Watts have been cruising the USA in their 300-square-foot recreational vehicle for 15 years, motoring up to eight months a year while keeping a permanent home in St. Charles, Mo.
“Our goal is to see all the national parks and historic sites in the U.S.,” Kay Watts says while hooking up her RV at Cherry Hill Park here.
But, according to a report in USA Today, with the economy reeling the two are meeting with their financial planner in April to determine whether they can continue to travel as much, given the drop of their retirement accounts. “As long as we’re healthy, we’d like to continue,” Ted Watts says.
Times are rough for the RV industry. Tightening credit and a lack of financing options are keeping new customers on the sidelines. Shattered consumer confidence is forcing many RV owners to cancel extended trips.
For years, RV dealers could do no wrong. The number of units sold grew for five consecutive years until 2007, and there are now 8.2 million RVs on the road.
But in 2008, when gas prices hit $4 a gallon and the recession gained strength, RV shipments fell 33% from 2007 to 237,000 – and could drop to 130,100 in 2009, according to the latest forecast from University of Michigan economist Richard Curtin.
The industry’s woes were brought to the forefront last month when President Obama pitched his economic stimulus plan in Elkhart County, Ind. “The RV Capital of the World” has seen its unemployment rate spike to more than 15% this year largely due to the industry slowdown.
The downturn does mean that RV prices – which range from $10,000 to $400,000 – are “easily down 25%,” says John Mancinelli of the Recreation Dealers Cooperative Association, or REDEX, the largest dealer cooperative.
Campgrounds are offering incentives to get families to stay longer and urging budget-conscious travelers to try local spots. Mike Gast of Kampgrounds of America, which runs one of the largest U.S. campground networks, says its bookings are down about 6% this year and rates will remain flat for many locations in 2009.
KOA runs a yearly May promotion that lets all customers paying for Friday night to stay Saturday for free. This year, it will run the promotion in August as well for loyalty program members.
“Our members are telling us their reservations are coming in pretty good. They were expecting a down year,” adds Linda Profaizer, president of the National Association of RV Parks and Campgrounds (ARVC).
But in a year when maintaining the current level of business is considered solid growth, industry officials are cautiously optimistic.
Like the rest of the industry, El Monte RV, a rental company in the Los Angeles area, relies heavily on bookings from in-bound Europeans, and their early reservation volume, though down slightly from a year ago, has been “relatively good,” says Joe Laing, an El Monte executive.
Still, it’s too early to tell. A vast majority of customers book within 30 days of travel, and the busy summer season is still a few months away. “It’s worrisome and we’re seeing customers are waiting longer to make advance reservations,” Gast says.
USA Today reported that the industry is also hoping to benefit from the country’s newfound sense of frugality by pitching RVs as a cheap way to travel. “People are economizing. But the good thing is that we seem to have become part of (that),” Laing says.
Time is also ripe for purchasers who can qualify for financing or are willing to bring larger down payments, says Steve Richardson, owner of Riverside, Calif.-based Richardson’s RV Centers. Apart from deep discounts, some dealers are even offering a free moped or car as an incentive.
Phil Comploier, a retired electrician who lives in his 263-square-foot RV and splits time mostly between College Park and Fort Lauderdale, wants to trade up to a larger vehicle. But if he trades it in at a dealer, he “may have to take a beating.”
“It will all depend on how my 401(k) looks,” he says.