Dealers retain rosy outlook

Posted on Written by Reagan Haynes
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Marine dealer sentiment remained at an all-time high in March, according to a new survey, but the three- to five-year outlook edged down for the second month in a row as dealer optimism around the election of President Donald Trump faded somewhat.

The Marine Retailers Association of the Americas/Baird Marine Retailer Sentiment Index remained at 81, where it was in February, but the three- to five-year outlook declined to 77, down from 79 in February and 82 in January. It still remained well above March of last year.

“Some of the dealer optimism surrounding the election of President Trump seems to have faded, which may help explain why the three- to five-year outlook metric has pulled back a bit from its record highs,” the March MRAA/Baird Marine Retailer Pulse Report said.

“[I am] concerned with the volatility of the Trump administration,” says one dealer respondent. “Have to be careful not to assume the short three-month bump in the stock market is a long-term thing.”

The percentage of retailers reporting new-boat retail growth in March also declined for a second consecutive month, but remained strong at 66 percent, compared with 80 percent in February. Seasonally, March is the most important month of the first quarter because more than half of the entire quarter’s sales occur during that month; March accounts for about 10 percent of annual sales. On the used-boat side, the percentage of retailers reporting increases in retail edged up to 59 percent, compared with 58 percent in February.

“Our checks suggest that U.S. demand for powerboats remains very healthy as the season picks up — though comments suggest boat show results have been mixed among different dealers,” Baird said in the report.

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Comments from respondents varied dramatically, with one saying, “All types [of boats] are selling, some better than others; nothing is ‘not working;’ ” and another saying, “Not much is working.” Some lamented that sterndrive sales continue to slide, with one calling them “nonexistent.” Several also said boat show sales had been lackluster, with one respondent calling them “very poor.” That seemed in direct conflict with several dealers that have cited strong sales through the winter boat show season.

Retailers reported that new-boat inventory remains below the levels of a year ago and well within a healthy range — 26 percent of retailers believe inventory is too low, compared with 36 percent that think it is too high. Used-boat inventory remains “very lean,” with 56 percent of retailers reporting that used inventory is too low, compared with just 11 percent that say it is too high. “We continue to believe that a limited supply of quality late-model used boats will eventually force consumers to consider new-boat purchases,” the report says.

The Pulse Report is designed to provide industry professionals with a regular, timely look into retail trends at the dealership level. It was launched by the MRAA and Baird Research in December 2013 as the first report of its kind compiled specifically for marine retailers.

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Soundings Trade Only joined the partnership with Baird and the MRAA in February and will continue to report its results.

Although the Pulse Report analyzes an array of industry data points, such as new-boat demand, inventory levels, access to credit and other indicators, the sentiment index, a sort of confidence index for retailers, was one of the chief reasons the reports were created.

In addition to raw numbers, Baird provides an analyst’s report to accompany each survey. The expert analysis of the most recent data available adds valuable context to detailed analytics and allows the information to be applied with confidence at dealerships.

Retailers that would like to participate in the next survey can email Baird senior analyst Craig Kennison at ckennison@rwbaird.com.

This article originally appeared in the May 2017 issue.

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