Goshen News, Goshen, IN

January 1, 2014

2013 is the best year for the RV industry since the Great Recession

2013 is the best year for the RV industry since The Great Recession

By ROGER SCHNEIDER roger.schneider@goshennews.com
Goshen News

---- — GOSHEN — The recreational vehicle industry is having one of its best years ever and is on track to reach its projected 10 percent gain in shipments.

Even in the traditionally slow month of November, shipments of recreational vehicles continued to surge. The Recreation Vehicle Industry Association said wholesale shipments of RVs to retailers jumped 5.8 percent in November over the same month in 2012.

And as of the end of November, the industry had shipped 299,451 RVs, the largest year-to-date total in six years. The growth in year-to-date shipments was 12.2 percent, according to the RVIA statistics.

The growth is a continuation of the industry’s climb back to prominence after the 2008-09 recession. And the growth is expected to continue into 2014.

“The growing strength in RV shipments is due to the strong affinity consumers have for RV travel and ownership coupled with strengthening economic conditions that have seen rising home and stock values, improved availability of credit, continued gains in jobs and incomes, and higher consumer confidence,” said Bill Baker, senior director of communications for the RVIA.

Some of those economic indicators are: home re-sales should reach 5.1 million in 2013, the best total in seven years, according to the National Association of Realtors; the national unemployment rate fell to 7 percent in November, a five-year low; the Consumer Confidence Survey in December rose to 78.1, up from 72 in November, according to the Conference Board; holiday retail sales rose 3.5 percent, according to Bloomberg.com; and U.S. automobile sales are at their highest mark since May 2007. According to Forbes.com, analysts expect auto sales to grow another 4 percent in 2014 to 16.2 million vehicles, which would bring the numbers back to a pre-recession level.

“Things are good,” said Richard Coon, RVIA president when he addressed his membership at the National RV Trade Show in early December. “Growth is everywhere, not just in North America interestingly enough. Growth in the RV industry is going up and up and up.”

In mid-year the industry’s analysts projected shipments would reach 316,300 units in 2013, which would be a 10.7 percent gain over 2012’s total of 285,749 units. Building on this year’s rapid growth, the RVIA is projecting a 6.1 percent shipment growth to 336,000 units for 2014.

“RV shipments are growing,” Coons said. “Consumer confidence is growing, credit is available, and RVs are visible, popular and even cool. This is a good time to be in the RV business.”

If the industry reaches its 2013 projection, it would be one of the top years for RV manufacturers, only being bested by numbers posted from 2003 to 2007. The high-water mark for the industry occurred in 2006 when 390,500 units were shipped to dealers.

Then came the recession of 2008-09, which whittled the RV industry and resulted in many consolidations and plant closings in northern Indiana, Oregon and other locations. Shipments bottomed out in 2009 at 165,700 units. Now, it’s estimated that 83 percent of all North American RVs are manufactured in Elkhart County.

Coon told industry members in May at the Elkhart County Power Breakfast, that 53 RV companies went out of business during the recession, with eight of them being absorbed by other companies. But, as the industry began to feel its way forward from the recession, 23 new RV-related companies were created, according to Coon.

Local benefits

The industry has contributed greatly to the growth in jobs in Elkhart County. The unemployment rate for the county stood at 7.6 percent in October, according to state statistics. That rate was far below the 9.2 percent rate of October 2012.

Of the five employers in Elkhart County with more than 1,000 employees, three are in the RV industry, according to Tim Hayland, president of the RV Group at GE Capital, which provides financing to the industry.

According to Dorinda Heiden-Guss, president of the Elkhart County Economic Development Corp., 30 RV companies are headquartered in the county and there are more than 100 companies in the county that supply the industry. She estimated that up to 30,000 local people help build RVs or the parts that go into them.

Heiden-Guss and Hayland gave their presentations at the Power Breakfast.

Roadblocks ahead?

Can anything derail the speeding RV locomotive this year? According to Baker, there are two factors that might slow, but not derail the RV train.

“Some possible roadblocks are lingering uncertainty about when interest rates will rise as well as government policies and practices and how that affects consumer confidence and the economic outlook,” Baker said. “Although the recently struck budget deal mitigates that concern somewhat in the short term.”