Data Suggest Consumers are Consuming Again

March 15, 2010 by · Comments Off on Data Suggest Consumers are Consuming Again 

Two days into the 52nd Annual Portland Metro Dealers RV Show, Curtis Trailers Inc. typically would have sold around 18 trailers.┬áThis year, amid gas woes and a recession, the Portland, Ore., company doubled that figure, sending 20 out the door on the first day alone, according to Portland’s The Oregonian.

Shirley Wilkerson was among the crowds at the Portland Expo Center, and she and her husband helped Curtis Trailers tick off another sale Friday.

Sitting in the 33-foot, fifth-wheel trailer the Vancouver couple snapped up for around $40,000, Wilkerson admitted she felt a little guilty making such a big purchase.

“So many people are out of work and the economy is so bad,” said Wilkerson, who’d just made friends with another couple buying the same model at the show. “But we had made this plan, and we’ve been working for this goal.”

The Wilkersons aren’t alone.

National sales figures released Friday show U.S. consumers are consuming.

The Commerce Department said sales increased 0.3% in February, far better than the 0.2% decline expected by Wall Street analysts. Take out the figures for car and gasoline sales, and the gain soars to 0.9%. Analysts had figured February’s unusually extreme weather would take a larger toll on sales. In addition, a recent weakening in consumer confidence had raised concerns that high unemployment and large debt would continue to limit household spending.

Instead, February saw sales grow in nearly every category: electronics up 3.7%, clothing 0.6% and building materials 0.5%. Car sales fell 2% last month, largely because of stormy weather and concerns over the safety of some Toyota vehicles, economists said.

Bolstering the optimism, a report last week showed that the nation’s retailers had posted their strongest sales since late 2007, with nearly every major chain showing robust results.

The Wilkersons are buying now as they look to the future. They’ll be retiring in a few years and say they aim to get things rolling now so they won’t face big bills after they stop working.

It didn’t hurt that, after a sluggish year, the recreation vehicle industry has attempted to keep prices on new rigs in check.

“About 90% of the 17 models we sell haven’t had a price increase, and we’re talking about newer models with more perks,” said Jim Snoozy, a Curtis Trailers sales manager. “People know it’s a buyer’s market, and they know they can buy more this year than a year from now when inflation kicks in.”

Curtis Trailers had sold a number of trailers that are less than 30 feet long, which Snoozy said can be towed by vehicles that most families already have, such as minivans and sports-utility vehicles. They’re also cheaper than a motorized RV — the difference between a monthly payment of $200 versus $1,000, said Jack Phelps, general manager of Olinger Travel Homes.

Olinger’s sales haven’t been as bullish, remaining on par with previous years. It sold three trailers and 11 RVs in the first two days.

Most retailers expect to see increased traffic at the show over the weekend.

Stan Postma of Canby expected to attend the show and probably buy a bigger trailer than his current model to make room for his grandchildren. On Friday, he bought a used Ford 250 pickup, which is big enough to handle a larger rig.

“We tried trailering and RVing last year and liked it,” he said. “It’s helpful prices haven’t come up. If they had gone up, we might have had a different consideration.”

Snoozy said many of his customers — often Baby Boomers who own their homes — have put off purchases for a year and simply tired of waiting.

“I’m hearing, ‘We don’t want to let this dictate our lives any longer … we’re just going to live our life,” he said.

For the Wilkersons, living life means retiring and traveling the country in a Keystone Mountaineer with a four-chair dinette, gads of storage in the bedroom and a kitchen at the far end.

Still, analysts are wary about putting too much on such spending surges.

“We remain concerned that consumers will stay on the sidelines during this economic recovery,” Capital Economics said in a research note. “Weak jobs growth, low wages growth and tight credit mean that any further acceleration in consumption growth is unlikely.”

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