Skip to main content
Updated:
Original:

Gas prices and consumer confidence are both up

Gas prices have unexpectedly jumped, but so has the University of Michigan’s latest survey of consumer confidence. Both are actually good news.

Somewhat surprisingly, the price at the gas pump has hit a new high for 2015, nationally averaging 10 cents more than a month ago. And while, according to AAA, it’s primarily attributable to a decline in gas stocks caused by high fuel demand and persistent refinery problems, we can expect to see the prices drop again shortly.

But the real story isn’t the price increase at all. It’s that even at current prices (national average $2.80), consumers continue to pocket an average savings of 86 cents per gallon year-over-year. Even better, in many areas, the average pump price is actually as much as 20 cents below the average. (California is highest at $3.49, while South Carolinians at $2.48 are saving more than $1 compared to Californians.)

So the current low gas prices should continue to result in boaters doing more boating as summer rolls along. Supporting that, Bob Musselman at Admiral/CD Propeller in Tampa says he has already seen a big increase in prop repairs and sales this year.

Meanwhile, the latest survey of consumer confidence by the University of Michigan indicates that the rising gasoline prices and even a higher cost of food hasn’t dulled consumers’ outlook. The confidence index rose to 94.6 in early June from 90.7 in May.

Specifically, Michigan researchers found consumers’ expectations regarding their own financial prospects have reached the highest since 2007. Separately, the Labor Department reported Friday that its producer price index, or PPI, for final demand was up 0.5 percent in May, the biggest gain in nearly three years. But the Labor Department’s PPI data reflects the 17 percent rise in gasoline prices and an unusual 56.4 percent “surge” in egg prices because of an avian influenza outbreak.

The generally good consumer feelings is likely why retail sales rose 1.2 percent nationally in May, according to the U.S. Commerce Department statistics. Consumers increased their purchases of durable hard goods, in particular.

Bottom line: Business should continue to be up for the marine industry. When you view a combination of the increased retail sales, recent job growth, rising wages and a reported stabilization of manufacturing activity, it’s not hard to believe the economy will reflect a definite pickup in the third quarter following a somewhat disappointing but still positive second quarter.

Statistically speaking, boat dealers should expect to see a continuing increase in boat and engine sales heading into the new model year.

Related

Year-End Tax Planning Guidance

These tips can help employers maximize cash savings, minimize tax exposure and more

Mercury Marine to Open Ind. Distribution Center

The new 512,000-square-foot facility will help the manufacturer meet record consumer demand for parts and accessories. The company is also expanding production at its main campus in Wisconsin.

GM Invests $150 Million in Pure Watercraft

An interview with Pure founder and CEO Andy Rebele.

Sea Tow, Southport Boats Form “Peace of Mind” Partnership

Sea Tow’s Gold Card, which includes two years of coverage, will now come standard with new Southport models.

Yamaha Rightwaters Goes International

The conservation initiative becomes an international effort as Yamaha Motor Australia joins a cleaner-ocean campaign.

Perfect Timing

With all the new boats sold recently, it’s inevitable that a good percentage will wind up on the used market. MRAA has launched a Certified Pre-Owned Boat Program to help dealers strengthen this profit center.

A Boatbuilder in Congress?

Robert Healey Jr., of Viking Yacht Co., is running for a U.S. House of Representatives seat in New Jersey.

Monterey and Blackfin to Expand Operations

The company will add 50,000 square feet of manufacturing space to meet increased demand, creating 150 job opportunities.