RV Industry Recovery Continues Move Forward
No matter how you look at it, things are looking up now and for the foreseeable future in the recreational vehicle industry.
That’s very important to Elkhart County and the state of Indiana, the South Bend Tribune reported.
The RV industry employs more than 24,000 people in Elkhart County, including RV manufacturers and suppliers. Northern Indiana builds 82 percent of all recreational vehicles in the United States, according to the Recreation Vehicle Industry Association (RVIA).
And the rebound of the RV industry is reflected in how much the unemployment rate has fallen in Elkhart County since 2009.
The unemployment rate is down to 8.9 percent in Elkhart County in June, a nearly 10 percentage point drop from the 18.3 percent mark it reached in January 2009 when Elkhart County was the poster child of the Great Recession.
But it’s the positive numbers coming out of the RV industry that further tell the story.
Wholesale shipments of all RVs were at 29,079 units in May of this year’s, according to the RVIA. That’s up 4.9 percent compared to May 2011. And for the first five months this year, RV shipments are up 8.6 percent compared to the same period last year.
“The industry is recovering,” said Kevin Broom, a spokesman for the RVIA. “We are not recovered. There is still some distance to go to get back to where the industry was before the recession.”
True, but the 2012 numbers are a far cry from 2008 and 2009. And this year is expected to mark the third straight year of increased shipments.
Steady rise since 2010
In 2009 shipments totaled 165,700 units; down 30.1 percent from 2008. Manufacturers shipped 237,000 units in 2008, which itself was down 32.9 percent from 2007 due to the recession.
Shipments in 2007 totaled 353,400 — the fourth highest total in the past quarter century, according to the RVIA. And 390,500 RVs were shipped in 2006, which was the high water mark for the past 25 years.
Mac Bryan, vice president for administration for the RVIA, believes those type of record numbers can again be achieved some day.
“It’s just how long will it take,” he said. “I think this growth will be steady but slow. You won’t see an all-time record in 2013 or 2014, but it’s moving in the right direction.”
University of Michigan economist Richard Curtin has long studied the RV industry. He predicts totals reaching nearly 270,000 shipments this year, which would be up nearly 7 percent over last year’s total of 252,300.
He believes shipments will reach 280,000 in 2013, up nearly 4 percent over 2012.
“In some difficult economic conditions, RV shipments continue to improve,” said Bryan of the RVIA. “That’s a positive sign in all of this.”
Dealers doing well
Robert Reid, owner of Great Lakes RV, says he’s seen an 18 percent sales increase through the first quarter, and he expects it to be even greater than that for the first six months.
He credits a number of reasons for the increase, including an early spring. “People were out early and we were able to capture some of that,” Reid said.
That kind of weather is not typical, of course, he said. But Reid also believes there are other factors involved in the success of his dealership, including its focus on customer service. Plus many of his former competitors are no longer in business as a result of the recession, he said.
“We sell a lot of fifth-wheels and travel trailers,” he said. “We put our investment into what was moving the best.”
He, too, sees the industry gradually climbing “rather than exploding.”
The willingness of banks to loan money to credit-worthy customers and the reduced volatility of the stock market also have played a factor in the sales increase, he said.
“It’s just basically, the general conception that everything is going to be fine for a while,” he said. “We haven’t had the $6 a gallon gas prices and people have not been losing their jobs.
“People are feeling more comfortable the last two or three years.”
Another factor that could keep those numbers rising is Baby Boomers reaching retirement age, where RV ownership is the highest.
Things looking up
There is evidence, certainly in Elkhart County, that things will continue to get better.
The recent news that RV maker Forest River Inc. plans to hire 440-plus workers by 2015 shows continuing improvement for the industry and the economy. Other RV manufacturers have added hundreds of jobs over the past few years and additional expansions are in the works.
“Consumer confidence has not come back to what it was pre-recession, but it has come back some,” Broom said. “And credit markets are tighter than they were but people can at least get loans today,” Broom said.
Pent-up demand, after years of consumers staying away from major purchases, also has helped, said Bryan.
And in some ways, it comes back to a simple fact — people like the lifestyle.
“They enjoy the freedom and flexibility,” Broom said. “To get away with their family and do it inexpensively.”
According to the RVIA, 8.9 million American households now own an RV.
“This is a good way to vacation,” Bryan said, noting some folding camping trailers go for as little as $3,000. “We want to get out with our families and our friends and do things, and this is an economical way to do it. “It’s all value oriented. Here’s a way of doing a lot of things with one investment.”