Increase in December registrations buoys dealer confidence

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Long- and short-term dealer sentiment moved back into positive territory in December, with the outlook on current conditions rising from 41 in November to 54 in December, and the three- to five-year outlook mirroring those numbers, according to the monthly Pulse Report survey.

Sentiment had been below the 50 mark, which is considered a neutral rating, since sluggish summer sales affected dealers around the country.

“Consumer sentiment seems to be hurting demand,” wrote one dealer responding to the Pulse Report survey, which is administered by Baird Equity Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only. “Consumers seem very distracted with political events, national trade issues and lack of confidence in the market, anticipating a slowdown that perhaps will affect their company and employment."

Dealers are also concerned about new-boat prices, with one commenting: “MSRPs and continued price increases are making it tough for middle America to get into boating.”

Of the 83 survey respondents, 36 percent reported growth, and 31 percent that said they had declines. Dealers were split on the economy depending on their location and segment, a trend that carried through much of 2019. Some dealers reported strong consumer confidence in December; others say buyers remain hesitant.

“We've had good late season activity,” wrote one dealer. “Can't really pinpoint why, but we'll take it.”

Another dealer said: “It is normal for December to be the lowest month of the year. However, we have experienced a downward turn starting in August.”

Almost 75 percent of respondents thought inventory was too high, affecting some segments more than others, Baird wrote in the report.

“Our checks suggest trends improved slightly in December, but we would not read into results too much in a seasonally less relevant month,” the report stated. “We expect destocking efforts to continue over the winter, setting up a cleaner 2020 season.”


The Calm Before the Storm?

Although key measures continued on an upward trajectory and unemployment numbers have fallen, the overall outlook for 2020 remains volatile.