Astronomically speaking, the spring season began last week, but in the recreational boating industry the spring selling season starts in February. This year, it did not start well.
According to Soundings Trade Only, the slim sales gains that the industry achieved in January vanished the following month as a harsh and snowy winter punished the Midwest, Great Plains and Northeast states. Persistent bitterly cold weather at times reached deep into the South, pushing aside thoughts of spring and good times on the water.
Statistical Surveys Inc. reported today (March 24) that sales in the main powerboat segments fell 5.3%, or 243 boats, to 4,315, in February and they dropped 3.4% industrywide, or 226 boats, to 6,371, from the same month last year in 29 early reporting states that represent about 68% of the U.S. boating industry.
Sales were lower in the main segments and industrywide for the first time since November and for only the second time since last April at the end of a three-month sales slump that was widely blamed on a cold, wet spring in many parts of the country.
Statistical Surveys national marine sales manager Ryan Kloppe was somewhat surprised by the February decline, but he said sales “were just down by a couple hundred boats. For a slow month, I’m not too concerned.”
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Two stalwart categories of aluminum boats and the largest segment of fiberglass boats delivered solidly higher sales in December that enabled the recreational boat industry to finish 2013 with a month of double-digit gains.
Soundings Trade Only reported that sales of pontoon boats rose by 28.5%, or 74, to 334, and sales of fishing boats climbed by 18.9%, or 132, to 829, in 27 early reporting states that represent about 61% of the national market, according to Statistical Surveys Inc. For the year, pontoon sales were up by 12.2%, or 4,005, at 36,854, in those states and sales of fishing boats were 3.9% higher, or 1,388, at 36,873.
Sales of 11- to 40-foot outboard fiberglass boats climbed by 18%, or 204, to 1,205 for the month and they were up 9.4%, or 3,228 boats, at 37,449, for the year.
Overall, sales in the main powerboat segments rose 16.3%, or 366 boats, to 2,610 in December and industrywide sales climbed 15.7%, or 520 boats, to 3,822.
Even though December is typically the slowest sales month of the year, “it’s still nice to see those double-digit gains year-over-year,” Statistical Surveys National Marine Sales Manager Ryan Kloppe said.
Full-year sales in the early reporting states totaled 198,476 for the year, a gain of 2.1% from 2012, and Kloppe said that nationwide the industry is virtually assured of selling more boats this year than it did last year. In 2012, 202,403 boats were sold across all 50 states, an increase of 9.6% from 2011. It was the first time since 2009 that sales topped 200,000.
Sales in the main segments are up 6% for the year, or 7,216 boats, at 127,068, in the early reporting states.
“It’s a great outlook for the industry,” Kloppe said. “We also follow the RV industry and sales there were up 13% to 14% in 2013. If we can get that positive momentum going in the boat industry — and we are seeing some of that momentum — I think we can continue to get positive, moderate growth for 2014.”
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The seemingly unsinkable aluminum pontoon market contributed what it could in November, but it wasn’t able to keep the recreational boat industry from experiencing a modest decline in sales, its first since the spring quarter.
According to Soundings Trade Only, sales in the main powerboat segments fell 1.5%, or 43 boats, to 2,794, and industrywide sales dropped 2.6%, or 106 boats, to 3,934, in 28 early-reporting states that represent about 64% of the national market, Statistical Surveys Inc. reported.
The industrywide drop was the first since June. Sales in the main segments, a group that consists of two aluminum and five fiberglass categories, fell for the first time since April.
Statistical Surveys national marine sales manager Ryan Kloppe said chilly weather contributed to the November decline.
“The weather turned pretty cold in November for most of the country,” he said.
November is traditionally a slow month for boat sales. The industry sold 5,069 boats industrywide in all 50 states in November 2012.
Florida was the November sales leader among the early-reporting states at 1,210 boats, followed by Texas (504), Louisiana (289), North Carolina (216) and Georgia (185).
Florida (1,109), Texas (569) and Louisiana (388) also led the sales list last year.
Rounding out the top 10 in November this year were California (183), Arizona (139), Michigan (136), South Carolina (126) and Tennessee (105).
Kloppe predicts that sales for all 50 states for the full year will be up about 6 percent in the main segments and 3 percent industrywide.
“We can consider that moderate growth, with momentum heading into 2014, where we can continue that growth,” he said.
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Where the weather is warm, boat sales have remained bright and, even though it was October, enough Americans were still buying that the powerboat industry reached double-digit percentage gains for the fourth month in a row.
Soundings Trade Only reported that sales in the main powerboat segments rose 16.9%, or 593 boats, to 4,105, and industrywide sales climbed 14.4%, or 755 boats, to 5,988, from October 2012 in 33 states that represent 63% of the national market, according to data compiled by Statistical Surveys Inc.
“These are really excellent results we’re seeing here,” Statistical Surveys National Marine Sales Manager Ryan Kloppe said. “You’re seeing the demand coming through.”
Kloppe said the consistent growth the industry is starting to get is creating the kind of stability that gives builders and dealers more confidence about what to make and stock.
Dealers he met this week at the Marine Dealer Conference & Expo in Orlando, Fla., told him they’re satisfied with their inventory levels.
“They feel very comfortable with what they have,” he said. “They’re probably carrying less inventory, but turning it faster.”
Kloppe said he thinks the industry will see small, but continued growth in November and December, which are traditionally slow sales months.
Florida was the October leader at 1,577 boats, followed by Texas (819), South Carolina (374), Tennessee (358) and California (312). Rounding out the top 10 were North Carolina (287), Michigan (265), Georgia (257), Arizona (191) and New York (153).
Florida (1,214), Texas (781) and South Carolina (330) also led the sales list in October last year, and each of those states said they had more sales this year.
With 17 states left to report, the industry has a chance to surpass the 7,140 boats that were sold nationwide last October, a month that ended with Hurricane Sandy slamming into the East Coast, devastating marinas and boatyards. BoatUS estimated that Sandy damaged or destroyed 65,000 boats at a cost of roughly $650 million.
For 2013 through October in the early-reporting states, sales were up 5.2%, or 5,901 boats, to 118,662, and industrywide they were up 1.5%, or 2,808 boats, to 185,818.
Will autumn prove to be the spring selling season that passed the boating industry by? Judging from September sales in early-reporting states, the mild fall that extended the summer in many areas was encouraging some consumers to buy now and not wait until 2014.
Soundings Trade Only reported that sales for the month in the main powerboat segments rose 18.3%, or 729, to 4,705, from September 2012 and industrywide sales rose 19.9%, or 1,239, to 7,472, in 25 states that represent 59% of the national market, according to data compiled by Statistical Surveys Inc.
September marked the third month in a row of double-digit percentage growth in both categories as builders and dealers rebounded from the effects of a cold, wet spring. The data raised hopes that the industry could have a second successive year of overall sales gains as it continues its recovery from the Great Recession.
“It’s really nice to see,” Statistical Surveys national marine sales manager Ryan Kloppe said. “Considering the slow spring we had, these are positive signs for the industry.”
Florida was the September leader with 1,449 sales, 280 more than the state reported in 2012. Texas ranked second at 1,171, followed by North Carolina (582), California (515) and Michigan (458). Rounding out the top 10 were South Carolina (380), Tennessee (336), Georgia (329), Mississippi (279) and New York (216).
Kloppe said all of the top 10-selling states and 21 of the 25 that have reported say they had more September sales this year than they did in 2012. “That’s big,” he said.
With the other 25 yet to report, the industry is likely to surpass its 50-state total from last September, when 9,412 boats were sold.
Sales traditionally slow as the year winds down, so Kloppe doubts that fall sales can overcome the effects of the weak spring even if the gains continue.
“It’s hard to make up for sales that were lost in April and May,” he said, but he said the positive momentum of the last few months “is a good sign coming down the homestretch of 2013.”
For the year through September in the early-reporting states, sales were up 4.7% in the main segments, or 5,009 boats, to 110,808, and they were up 1% industrywide, or 1,740, to 173,902.
More Americans took to the water in new boats this summer, often buying smaller, less expensive models, as the industry is showing signs of a recovery.
Bloomberg reported that purchases of powerboats — which include yachts, pontoons and fishing vessels — rose 18.9% in July from a year earlier, according to figures from Statistical Surveys Inc., a research company based in Grand Rapids, Michigan. Even with mild summer weather and a cold winter, year-to-date sales are up 3.1%, the data show.
The industry “is performing pretty well again” after bottoming in 2010, with smaller boats — those under 30 feet in length — showing particular strength, said Tom Walworth, the company’s president. This category has rebounded about 13% since 2010, outpacing the 9.3% growth rate for larger craft, a sign there’s been a lasting shift in consumer preferences since the 18-month recession ended in June 2009, he said.
“What really stands out in the economic recovery thus far is that demand for smaller boats is coming back pretty nicely,” said Michael Swartz, an analyst with SunTrust Banks Inc. (STI) in Atlanta. That’s partly because “very lax” lending standards before the recession have become more restrictive, so people are buying what they can afford, he said.
Boat purchases are highly correlated with consumer confidence and gross domestic product, according to Thom Dammrich, president of the National Marine Manufacturers Association in Chicago. Sales aren’t near the previous peak yet because the economy is growing only modestly and the industry performs best when annual GDP exceeds 3%, he said.
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The heat of July — the heart of the American summer — never fails to lure boat owners and their families to the water. This year, according to a report by Soundings Trade Only, it also apparently attracted plenty of new people to boating.
After the industry’s late spring rally appeared to fade in June, recreational boat sales suddenly got hot in July. Led by aluminum pontoon boats and 11- to 40-foot outboards, five of the seven categories in the industry’s main powerboat segments showed double-digit sales gains in 31 early reporting states, according to figures compiled by Statistical Surveys.
Pontoon sales rose 24.8%, or 769 boats, to 3,867, giving the increasingly popular segment the best results of any of the industry’s high-volume categories. Close behind were small to mid-sized outboards, where the gain was 23.1%, or 658 boats, to 3,512.
Ryan Kloppe, national marine sales manager at Statistical Surveys, said it was a relief to finally see the surge in boat sales that the industry has been expecting.
“Everybody has been talking about pent-up demand,” he said. “We’re obviously seeing some of that in July.”
With 19 states and more than a third of the market yet to report, the industry has a chance to surpass its 50-state totals for July 2012, when 14,767 boats were sold in the main segments and 28,192 were sold industrywide as sales continued a year-long recovery from recession-era levels.
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The recreational boating industry’s growth engines sputtered in March amid inclement early spring weather as overall sales dropped for the second month in a row after a year of recovery and consistent gains.
Soundings Trade Only reported that sales of aluminum pontoon boats rose just 1.3%, or 18, to 1,386 from the same month last year in early reporting states and sales of 11- to 40-foot outboard fiberglass boats were virtually flat, dropping by 15, or 0.5%, to 2,767, according to Statistical Surveys Inc.
Both categories were sales leaders in 2012 as the industry began to turn its fortunes around after the recession ended.
Sales in the industry’s main powerboat segments, which consist of five fiberglass and two aluminum categories, fell 5.9% to 7,257 and industrywide sales dropped 10.7% to 10,564 in 27 states that represent about 63 percen%
A year earlier, with all 50 states reporting, main-segments sales rose 16% while industrywide sales climbed 14%
The industry is at the midpoint of the spring selling season, which runs through May. March sales represent 11.4 to 12.6 percent of the year’s retail activity.
Statistical Surveys National Marine Sales Manager Ryan Kloppe said chilly, wet weather limited sales in March.
“I don’t think the recovery is in jeopardy,” he said. “In March last year it was 82 degrees in the Midwest and sunny. This year it was 42 degrees and it was raining and snowing.”
Kloppe said builders and dealers told him they’ve seen good attendance at boat shows, but that poor weather, particularly in the Midwest, has discouraged people from buying.
“They expect slight growth as soon as the weather warms and people start purchasing boats,” he said.
The superb performance of the U.S. stock market continues to offer optimism that the so-called “wealth effect” could continue to boost boat sales in 2013.
The most recent good news was last Thursday’s record close of the Standard & Poor’s 500-stock index, the most widely followed barometer of the U.S. stock market, at 1,569.19, topping its previous peak, which had stood since Oct. 9, 2007.
The current performance of the U.S. stock market would have seemed improbable during the depths of the financial crisis after the October 2008 market crash, given that the nation led the global economy into recession, according to a report in The New York Times.
Economists credit the relative speed with which the U.S. government and the corporate sector responded to the causes of the 2008 crisis for the current measured rebound.
“The U.S. addressed the problems of the financial crisis faster and with much more ferocity than the rest of the world,” Edward M. Clissold, a market strategist at Ned Davis Research, said in the Times article.
Beyond the stock market, the marine industry can take heart in reports that U.S. consumer spending in February climbed by the most in five months as incomes rose, signaling that an improving job market is spurring demand. The term “wealth effect” refers to an increase in consumer spending that accompanies a rise in perceived wealth.
“The economy is in a very good place right now ahead of the fiscal restraint,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. In New York, said in a Bloomberg article. “This recovery is sustainable. Consumers are in the driver’s seat.”
A report today by CNBC notes that the two strongest equity sectors that have fueled the S&P 500′s recovery are stocks based on consumer staples and consumer discretionary spending. So-called discretionary and staples stocks have posted 14 straight quarters of earnings growth, the longest streak among the 10 S&P 500 sectors.
A year ago, spring arrived early in many parts of the country and the recreational boating industry rode a large and early wave of customers to strong results in February. This year, the industry appears to have caught a chill.
Soundings Trade Only reported that in the industry’s main powerboat segments reversed course. Rather than the double-digit gain of a year earlier, the group that consists of two aluminum and five fiberglass categories saw a 9.5% decline in sales to 4,013 boats in February from 4,434 in the same month a year earlier, Statistical Surveys Inc. said today.
Industrywide, sales dropped 9.8% to 5,853 from 6,491 a year earlier.
Statistical Surveys national marine sales manager, Ryan Kloppe said the 2013 results suffered by comparison with the sharp sales gains the industry had in 2012.
“We had a heck of a February last year,” he said.
The February 2013 data in the Statistical Surveys report are based on information from 27 early reporting states that represent about 63% of the U.S. boat market. Reports of sales of documented vessels were complete only through November because of data entry delays at the Coast Guard, creating an incomplete report for boats larger than 31 feet and understating the cruiser and yacht markets.
“Obviously we know how far the Coast Guard is behind and that is part of [the reason the sales figures appear so low],” Kloppe said.
A year ago, when reports from all 50 states were in, main-segments sales rose 34% in February to 5,662 from 4,228 in February 2011. Industrywide sales climbed 28% to 10,119 from 7,814 in the previous February, Kloppe said.
February sales typically amount to 4.4% to 5.5% of the year’s retail activity. The month represents the start of the spring selling season, which runs through May.
Among the main segments, the only category that showed a gain in February this year was aluminum pontoon boats, where sales rose 10.6% to 636. Categories that declined did so in double digits, except for 11- to 40-foot outboard fiberglass boats, where sales were off by a slight 1.8%, or 32, to 1,745.