In light of an improving consumer outlook, more than half of marine industry survey participants say now is the time to increase inventory levels to be fully stocked for the spring selling season.
That’s according to results released by GE Capital, Commercial Distribution Finance (CDF), which reported that 51% of respondents said it was the best time for dealers to increase inventory.
GE Capital’s survey was conducted Feb.13-15, according to The Wall Street Journal’s Market Watch. The respondents are a variety of marine industry participants, including manufacturers, dealers and distributors.
“Overall, our data indicate sales are improving, costs are down and earnings are up at the dealer level,” Bruce Van Wagoner, president of CDF’s marine group, told the paper. “We believe that 2013 will look a lot like 2012 — slow and steady growth in a smaller, healthier market.”
Forty-three percent of survey respondents said they expect sales to increase 5% to 10% this year, and 30% said they expect sales to increase 10% to 15%.
CDF’s forecast calls for the marine industry to grow about 8% in the United States in 2013. “Of course, positive news on some of the most critical economic factors could kick up consumer demand and drive industry performance beyond current expectations,” Van Wagoner said.
Forty-two percent of survey respondents said consumer demand was their greatest business concern, down from 64% in 2012.
Asked which trend will have the largest impact on the boating industry this year, 32% of respondents pointed to the popularity of low-cost or “base” models, up from 23% last year. Thirty percent of respondents expect long production lead times, compared to 21% last year.
Last winter, reports in January of rising sales of pontoon boats and small to midsize outboard fiberglass boats were a pleasant surprise in the U.S. boatbuilding industry.
Soundings Trade Only reported that such results since have become the norm, and sales figures that Statistical Surveys Inc. released today (Feb. 22) show that the industry is continuing to build on the momentum it created last year.
January sales in the main powerboat segments, which include two aluminum groups and five categories of fiberglass boats, rose by 374, or 14.7%, to 2,910, in 29 early reporting states, from 2,536 in the same month a year earlier. Industrywide sales rose by 487, or 12.8%, to 4,287.
“2013 is off to a positive start, a good kickoff,” said Ryan Kloppe, national marine sales manager at Statistical Surveys. “It’s a nice, moderate increase.”
Kloppe is confident that the data accurately portray the state of the industry, even though January is traditionally the second-lowest sales month for boats. It typically produces just 2.6% to 3.5% of the industry’s annual retail activity.
The states in Statistical Surveys’ January report represent 64% of the national market.
Kloppe said dealers who spoke with him at the Miami International Boat Show last week “feel they’re in a good position. I saw ‘sold’ stickers on boats throughout the show, which was good to see.”
The aluminum pontoon category had the highest sales increase within the main powerboat segments on a percentage basis in January, just as it did a year earlier. Group sales rose by 75 boats, or 28.1%, to 342, from 267 a year earlier. Sales in the 11- to 40-foot outboard fiberglass category rose by 288 boats, or 26.1%, to 1,392.
It’s official: 2012 was a comeback year for the recreational boating industry.
Soundings Trade Only reported that industrywide sales rose 9.4% to 196,519 boats, and sales in the main powerboat segments climbed 11.2% to 121,789 compared with the previous year. The totals represent 26 early reporting states that represent 64% of the nation’s boat market, according to Statistical Surveys Inc.
Sales were weak during the traditionally slow month of December, but that did little to dispel the notion that the industry has forged a potentially enduring recovery. For the year, sales of 11- to 40-foot outboard fiberglass boats rose 12.9% to 35,257 in the early reporting states and sales of aluminum pontoon boats rose 20.9% to 32,934.
Pontoons and aluminum fishing boats were sales leaders throughout the year. Fishing boat sales rose 9.1% to 36,402.
Unless the economy suffers a shock in 2013, “I really think we’ll continue this slow, moderate growth,” said Ryan Kloppe, national marine sales manager at Statistical Surveys.
Slowed by the aftereffects of Hurricane Sandy, Kloppe said, the industry didn’t have much to celebrate in December. Industrywide sales rose just 1.1 percent to 3,351 in the early reporting states and sales in the main segments rose only 1.3 percent to 2,285.
“The full amount of relief hasn’t come to [the areas affected by Sandy],” he said.
December sales traditionally represent only about 2 percent of the year’s total volume.
More evidence that the U.S. economy is climbing out of the recession: Sales of new recreational powerboats are estimated to be up by 10% in 2012, according to the National Marine Manufacturers Association (NMMA).
“We are pleased to see the industry growing,” NMMA president Thom Dammrich said. “Our projection is the industry will grow in 2013 by another 5% to 10%.”
The Miami Herald reported that Dammrich said the level of growth depends on conditions like consumer confidence and the housing market — and sustained increases in Americans’ participation in outdoor recreation.
The 2012 projections represent the first signs of steady growth across the powerboat market since the economy hit bottom in 2008-09 and new boat production dropped 80%. Even now, Dammrich, said production and retail sales are only about half of what they were during the peak in 2007.
Fueling the growth in new boat sales are purchases in the 15- to 26-foot range, which make up 96% of the 12.4 million boats registered in the U.S., according to the NMMA. While the numbers are up in almost every segment of the industry, the toppers are pontoon boats.
“Twenty-five percent of all boats sold today are pontoon boats,” Dammrich said. “They’re a very versatile boat, very stable. They can be large and roomy. You can fish. You can swim. You can get the family out for the day.”
Dammrich said the only category that has not turned around is stern-drive inboards over 30 feet. Larger and more expensive than the typical family boat, these models are often purchased through home-equity loans, he said. Another factor is this year’s requirement that stern-drive inboard engines have catalytic converters, which increases the cost significantly.
In 2011, boating participation rose 10% to 83 million — the largest proportion of adults who went boating since 1997, according to the NMMA. Those boaters who liked the sport enough to buy their own watercraft found very few late-model, pre-owned boats for sale because of the drop in production during the recession.
“Those people are going to end up buying a new boat,” Dammrich said.
Editor’s Note: Following the release of the boating retail report from Statistical Surveys Inc., the investment firm of Robert W. Baird & Co. distributed a routine advisory note to its investors. Highlights of that note follow.
October powerboat retail bounces. U.S. powerboat retail jumped 22% in October, according to Statistical Surveys. October typically represents 4% of annual sales. Stronger growth continues in lower-priced areas of the market, with aluminum powerboats and fiberglass outboard (both +25%) drive the increase. Through October, retailers are on pace to sell 156,000 powerboats in 2012 (+12%).
• U.S. powerboat retail up 22% in October. U.S. powerboat retail jumped 22% in October — the most robust growth in over six months. The month of October falls in the offseason for boat sales, and accounts for 4% of the annual market. U.S. powerboat retail remains up 12% YTD in 2012.
• Smaller fares better. Smaller boats continue to perform better than larger boats, consistent with our expectations. Notably, sales of 14-30 foot fiberglass sterndrive units grew 18% following several months of declines. We believe consumers have more equity (or less negative equity) in smaller boats, driving better trade-in activity.
• Sandy destruction. Early assessments indicate as many as 65,000 boats were damaged in the wake of Hurricane Sandy, one of the most destructive storms on record.
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