It’s been a long and winding road, but Americans are continuing to make their way back to the water in ever-increasing numbers. You hear their confident tones in conversations on the docks, at boat shows and marinas, on the sandbars and in the watering holes. More and more, they’re talking about their “next” boat or what they’re adding to their current one or where they’re going on the water this weekend. And you see it in the improving boat sales numbers, too.
What do I foresee for 2015? With a number of key economic indicators, such as employment and housing, continuing to improve, the momentum of the last couple of years should quicken and strengthen. Consumer confidence in October hit a seven-year high, and fuel prices continue to fall dramatically. One wild card remains the uncertain global economy, which the U.S. economy has so far been able to weather.
The U.S. benchmark price for crude oil in December broke the $60-a-barrel threshold for the first time in more than five years (down more than 40 percent since early summer); the average price of a gallon of regular was about $2.60 and falling.
The International Monetary Fund raised its forecast for U.S. growth in 2015 to 3.5 percent, in part because of expected lower energy costs. The savings from cheaper heating oil and gasoline could amount to as much as $1,500 per household, the equivalent of a nice middle-class tax cut, according to some estimates.
For boaters, those extra discretionary dollars should translate to more time on the water, more hours on the engines.
New-boat sales in 2014 were holding up well through the fall and should finish somewhere between 5 and 7 percent higher, according to the NMMA. Expect modest but healthy growth in 2015, perhaps something on the order of 5 percent. Along with improvements in consumer confidence, boat show attendance has been up, another good signal.
Some segments, of course, will do significantly better than others (pontoons, aluminum fish, fiberglass outboards), as will certain builders. Although it’s not a return to the salad years, some dealers and builders have had their best year ever, in part because of careful expense control, in part because they have the right new product.
Innovation is in the air, and companies that “excite” the market with new product will remain on top. The winners will be those who use technology in smart, inventive ways — to improve efficiency, to ensure better reliability, to make the consumer experience more enjoyable. But beauty better be more than skin deep.
Technology for technology’s sake is a fool’s errand. Boats are expensive enough without adding costly doodads that bring little in the way of real value or tangible benefits.
So where does it make sense? Digital switching on increasingly smaller boats is one example. Some may question the wisdom of relying heavily on electronic equipment, but Ed Sherman, of the American Boat and Yacht Council, says the automotive industry has long made these systems work reliably in cars, which operate in harsher conditions than what we face in marine settings. “We are driving the most reliable vehicles ever today, in large part because of electronic integration,” says Sherman, the director of educational programming for the ABYC, in an article for Soundings magazine. “Achieving this sort of reliability in the marine realm should be comparatively easy.” And that is the kind of change that will move the dial.
Plenty of us of a certain age grew up making excuses for poor quality and shoddy workmanship, muttering the words: “What do you expect? It’s boat.” That mindset doesn’t cut it any longer. The good news: Boats and engines have gotten a lot better. The bad news: They aren’t cheap.
Even as innovative products continue to drive sales, the affordability issue remains. Are we selling high-end boats to a wealthy but shrinking demographic (the boomers) at the expense of the next generation? It’s a fair question, but not one with an easy answer.
Baby boomers will continue to drive this market for some time. But the equally large millennial generation is mustering on the horizon. And they will eventually transform this industry in ways that aren’t yet clear.
The coming generation is used to a high level of quality, design, reliability, refinement and fit and finish in a host of products, from smartphones and tablets to automobiles. I suspect they’ll demand it in boats, too. They may well prove be the sharpest consumer this industry has seen, but that, as they say, is still down the road a piece.
Have a great year.
This article originally appeared in the January 2015 issue.