When the subject is the economy and business trends, I gravitate to numbers, percentages and the plethora of analysis over what they mean and where we’re likely headed.
The usual suspects, in no particular order, are: consumer confidence surveys, the job market, interest rates, consumer spending, energy costs, GDP, the number of new boats recently sold, demographics, the average age of a new-boat buyer, inventory levels, stock market trends, housing starts, auto and RV sales, and so on.
But I didn’t need any of those numbers or markers this winter to tell me that things were, as my Nana used to say, cooking with gas. All I had to do is walk the docks and tents at the Miami boat shows, eyes and ears wide open, and watch as consumers crowded the docks, climbed through boats, talked with salespeople and took test runs.
At lunch I eavesdropped as groups of friends discussed what boats they were going to hit next. I saw a lot of smiles and heard plenty of laughs. And this non-scientific observation, too: People walked with a strut I had not seen since before the Great Recession. Confidence is back.
None of these perceptions, of course, is quantifiable. But they certainly passed the eye and smell test with flying colors — and they also provided a level of ground truth to what actual numbers both in our industry and in the broader economy are telling us.
The foundation of the nation’s economy is solid, and confidence is strong. The jobs report for February showed continued steady growth, with the Labor Department reporting a gain of about 235,000 jobs. In addition, wage growth was also healthy. In our neck of the woods, new-boat sales for January were up 8 percent year over year in the major powerboat segments and 9.5 percent industrywide, a nice way to start 2017.
There was ample new product on display at the winter shows, and, of course, plenty of new boats, engines, electronics and accessories have been introduced in the last several years. After a period of product doldrums that the recession caused, the current abundance of technology, styling and imagination is a sure sign the industry has regained its footing. The proliferation of ever larger dayboats powered by ever larger (or more numerous) outboards is positive proof that the current fleet reflects how people use their boats today, not how they once did.
Consumers are increasingly holding boatbuilders to automobile standards in terms of quality, even if we don’t produce a fraction of the volume of the automakers. The best builders deserve credit for smoothly integrating their increasingly complicated systems and making the complexity disappear behind intuitive, well-conceived controls, helms and layouts.
As the cost and sophistication of boats climb, so, too, does the expectation for reliability. On the water, dependability is as much an expression of luxury as LOA, leather, teak and four big outboards.
A number of companies in Miami talked about plans to introduce larger boats over the next couple of years. That came as no surprise, given the surging stock market and the fact that animal spirits are back in force. Are things getting a little too frothy?
Time will tell, but given the glacial pace of this recovery, many folks are betting the economy still has a way to run. At the industry breakfast in Miami, NMMA president Thom Dammrich told the crowd that the industry is expected to peak in the first quarter of 2018 and then continue to grow, although not as fast, through the first couple of quarters of 2019.
Might we be looking at an economic boom, a new virtuous cycle? There is debate now over whether the economy is nearing its full productive capacity or whether there is still ample room for growth.
Although plenty of things could upend our economic apple cart, there are buyers on the docks right now and boats to be sold.
I spoke with one builder who is expanding his plant but not through debt, a lesson he says he learned the hard way during the recession. He says he is prepared for a recession in the next couple of years but is making hay while the sun is out.
That has the ring of good advice.
This article originally appeared in the April 2017 issue.