MIAMI: GE Capital economist preaches ‘positive momentum’


The theme of the Industry Leadership Conference on Wednesday at the Miami International Boat Show was “A New Spirit in the Market,” and Rob Podorefsky, the managing director of GE Capital’s Interest Rate Management Group, provided enough good news to give that spirit a boost.

“For the foreseeable future, we’re good to go for a sustainable recovery,” Podorefsky said, predicting “moderate” 2 percent growth for the U.S. economy in 2013, weak wage growth and export opportunities in the developing world — China and Latin America in particular.

Home prices increased 5-1/2 percent year-over-year last November, which is higher than both the inflation rate and mortgage rate. “That’s extremely good news,” he said. “That’s positive momentum.”

U.S. monetary policy has aggressively increased the money supply while maintaining low interest rates. “[The Fed] has done a remarkable job” in some categories, he said.

Personal spending has been up for 12 straight quarters. “That’s real growth,” he said. Meanwhile, government purchases and investments have been declining. He said this was “OK — not the end of the world.”

The nation’s $16.39 trillion deficit, which is about the size of the GDP now, is “scary,” he said. Policymakers in Washington, D.C., appear to be in a more conciliatory mood, but he said a misstep in dealing with taxes, spending cuts and budget cuts could have “serious consequences.” Yet sequestration “will not be the end of the world,” either, Podorefsky said.

Podorefsky doesn’t see any big increases in fuel prices coming in 2013. Another positive: 3.6 million jobs — most of them in the leisure, transportation and health-care industries — are open now and must be aligned with those “who are qualified and in need.”

Overall it’s “not bad from a prognosis perspective,” he said.

National Marine Manufacturers Association president Thom Dammrich said the marine industry is smaller than it was five years ago, but it started to expand in 2012 and he predicted that it will continue to do so this year.

The challenges remain daunting: aging boaters, aging boats, shrinking numbers of registered boats and changing demographics. He says industry leaders continue to work on their vision for success in 2021, developing programs in six areas: marketing and communication, education and training, attracting youth, diversity, affordability and advocacy.

The Discover Boating Facebook page is one of the top 10 pages in the leisure industry, with more than half a million fans and 1.8 million visitors, he said.

Dammrich issued a call for every segment of the industry to join that effort and volunteer to work in one of the six areas. He also called on the industry to join the American Boating Congress in lobbying their legislators May 8-9 in Washington, D.C.

“More participants create a louder voice and make a bigger impact,” he said.

“There’s good reason to have a positive attitude,” GE Capital commercial distribution finance division marine group president Bruce Van Wagoner told industry leaders. The median dealer it works with showed a 30 percent improvement in 2012 from 2011, “which is absolutely outstanding,” Van Wagoner said.

Sixty percent of dealer boat inventory was more than a year old in 2009; that figure was down to 14 percent in 2012. “This is the healthiest position in the history of the industry,” he said. “Stressed inventory is moved out.”

Van Wagoner said his organization will continue monitoring dealer inventories “to keep this industry healthy.” He said the commercial distribution finance division projects an 8.8 percent increase in retail and wholesale sales dollars in 2013. He said the commercial distribution finance division extended $422 million in new credit in 2012 and that the company has the capacity to lend $1 billion more. The company took 75,000 dealer orders in 2012 and approved 97 percent of order applications.

“When [dealers and manufacturers] succeed, we succeed,” he said.

— Jim Flannery

This story was updated on Feb. 19 to clarify Podorefsky’s remarks at the conference.


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