Goshen News, Goshen, IN

Business

May 10, 2013

RV industry’s resurgence heralded at 'Power breakfast'

ELKHART — The good times are coming back for the recreational vehicle industry.

According to speakers at the RV Power Breakfast Thursday morning, while the industry is still far below its output of the pre-recession years, growth has occurred in the past two years and is expected to continue through the end of 2013.

“We had some good times back in the 70s,” said Mac Bryan, vice president of the Recreation Vehicle Industry while he stood in front of a screen full of numbers recounting the historic ups and downs of the industry. But all the recent numbers are moving upwards.

RV shipments from manufacturers were 353,400 units in pre-recession 2007, then dropped to 165,700 units by 2009. Since then the industry has had steady growth, with gains each year through 2012. When 2012 ended, 285,900 units had been shipped. The RVIA forecast for this year’s shipments is 307,300 units.

The North American demographics favor the RV industry, Bryan said. Based on historical data there are 8.9 million RVs in use now and there should be about 11 million RVs in use by the end of the decade. To reach that milestone the industry will have to produce about 350,000 units on average each year, he said.

Reflection on hard times

“With creativity and imagination, there is no limits to the amount of RVs that can be sold in the next decade,” he told the industry leaders. “And I see no lack of either in this room.”

But there most likely were fewer RV members at the breakfast than would have been attending in the past. Richard Coon, RVIA president, said that in 2008 the trade organization had 555 member companies. Membership was 410 members in 2013.

That decline of 26 percent is due to the recession and the resulting consolidation and winnowing that occurred.

“Since 2008, 53 companies have gone away,” Coon said of the industry. Eight of those RV companies were absorbed by others. He said only one company quit the organization during the recession and has not rejoined.

A positive trend is that there have been 23 new RV-related companies created in recent years, Coon said.

Always a preacher of the RV gospel, Coon was a strong advocate before, during and now after the recession for the RV lifestyle and the quality of products produced.

Even during the height of the recession, the travel trailer segment of the industry remained strong, according to Coon and in 2012 that segment was still solid.

And, consumers can find a travel trailer bargain.

“The price of a conventional trailer is almost the same as it was 15 years ago, but the product is better,” Coon said. “That is a real tribute to the people in the room.”

Jobs engine

Those RV people are leading an industry that provides tens of thousands of jobs to local residents as well as creating billions of dollars of products that boost the nation’s gross domestic product.

“Northern Indiana has an economy that builds things,” said Tim Hyland, president of the RV Group at GE Capital.

So much stuff is built in Elkhart County that it remains a manufacturing center as many parts of the nation move toward service sectors.

“Elkhart County ranked in the top 2 percent of manufacturing economies in the nation,” Hayland said. “Half of workers in Elkhart County are (in) manufacturing jobs. In the Goshen-Elkhart MSA (Municipal Statistical Area) there is five times the national employment share for production occupations, the highest percentage of production occupations in the country.”

He said 83 percent of all North American recreational vehicles are built in Elkhart County.

“There are five employers in Elkhart County with more than 1,000 employees and three are in the RV industry,” Hyland said.

Good times roll

As Hyland and a string of other speakers were inside the RV Hall of Fame and Museum just off C.R. 17 along the Indiana Toll Road, evidence of the industry’s recovery was rolling past outside. Semis loaded with trailer axles were turning off C.R. 17 onto C.R. 6 to head to the RV plants scattered around the north and east side of Elkhart.

Dorinda Heiden-Guss, president of the Elkhart County Economic Development Corp., said that 30 RV companies have their headquarters in the county and there are more than 100 companies in the county that supply the industry. She also estimated there are 25,000 to 30,000 local people employed by the industry. And, 45 percent of the county’s economy is based on manufacturing, according to Heiden-Guss, and 39 percent of that segment is RV-related.

The annual economic footprint of manufacturing in the county is about $5 billion, according to Heiden-Guss.

The EDC’s arsenal includes working with the state and local governments to grant property tax phase-ins for expanding companies, according to Heiden-Guss. In the past three years, she said there has been $30 million in such phase-ins granted to local companies. Those companies in turn have invested $150 million in buildings and equipment and have announced the creation of more than 4,000 jobs tied to the expansions.

“We thank you for investing in Elkhart County,” Heiden-Guss said.

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