As we put another year in our wake and study the horizon, conditions look favorable for making continued headway. Our annual forecast starts on Page 14 and contains prognostications for the year ahead from 25 industry leaders.
From employment to consumer confidence, a host of positive economic indicators suggest growth should continue through 2018 and beyond.
It’s no secret that our industry does well when the Consumer Confidence Index is above 100. New-boat sales are closely correlated to the CCI, which stood at 129.5 at press time, the highest in almost 17 years. That’s a sure sign.
How strong are things? Following the release of the unemployment figures for November, a headline on the front page of The New York Times on Dec. 8 read: “Jobs Numbers Show ‘A Really, Really Strong Economy.’ ” The unemployment rate for November was 4.1 percent, same as it was in October, the lowest since 2000.
The wealth effect spurred by the record stock market — the second-longest bull market on record — continues to fuel boat sales and add to consumer confidence. Inventory levels are considered healthy, and dealers are hopeful that the dearth of late-model used boats will continue to spur sales of new models.
New boats with innovative features have been pulling folks off the fence and into showrooms for the last six years. Post-recession, builders have done a good job of adding a host of features to differentiate their new models from their competitive used offerings. These next-generation boats are easier to operate and offer improved performance, ride, comfort and reliability, along with better connectivity — all qualities consumers have come to expect in their automobiles. New will continue to outsell warmed-over “new” models.
As an industry, we face our share of challenges. They range from workforce issues and shortages to changing demographics, first and foremost being the aging of our core boat-buying cohort.
In fueling the growth of the industry for the last two decades, baby boomers have also introduced a record number of young people (children, grandchildren) to boating. Millennials are a key to the long-term growth of the industry, and those with the water gene are particularly strong candidates, especially if the adage that purchase follows participation holds true. Perhaps boat clubs and peer-to-peer initiatives will eventually move younger participants toward ownership.
Are there enough affordable, well-designed entry-level boats on the market to attract younger buyers? The entry-level boat for most people will continue to be a used boat. That’s how most of us got our start. The average powerboat today is about 25 years old. My concern is that when a first-time buyer purchases a two-decades-old boat, his or her expectations too often won’t match the actual on-water experience — and we lose another customer.
Not only do we need to do a better job of attracting new boaters, but we also have to do more to retain them. A lack of transparency over the so-called hidden costs of boating has surfaced as one reason they leave, the NMMA says.
Bottom line: The industry should see its seventh consecutive year of growth in 2018, with new-boat sales rising about 4-5 percent, according to most estimates. These are the new good old days.
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This issue also marks the last with Dean Waite as publisher. I don’t need a crystal ball to remind me how much I’m going to miss working with Dean, who remains a close friend and will continue to assist the magazine in an advisory capacity.
Dean persuaded me to join Trade Only at the outset of the Great Recession. In hindsight, the timing couldn’t have been better. Although neither of us want to go through something like that again, the experience has given both of us the perspective to appreciate where the industry has climbed back to today.
I remember walking the trade show floors with Dean when things were at their lowest. You could roll a bowling ball down the aisles around 4 p.m. and not hit anyone.
There wasn’t much business to write, so Dean just talked with his clients, many of whom were also his friends. Through those conversations I got to understand the strong relationships he’d carved out with a host of industry folk.
Through lean times and growth years, Dean and I spent hours chattering about industry trends, challenges and gossip. We had plenty in common. Both of us started in newspapers, and both of us own boats and love to fish. We never tired of talking about something or other related to boats and business. We worked well together.
Trade Only was always more than a job for Dean, who regarded the industry as his second family. He sold advertising into Trade Only through his relationships, confirming the old saw that people like to do business with people they like. And he also grew the brand through the partnerships he forged with trade shows, here and abroad.
This industry was built by smart, opinionated entrepreneurs and characters, one reason Dean felt right at home. He is an original old-school publisher who understands that success comes from listening to your clients, building relationships and putting integrity into every handshake. He will be missed.
This article originally appeared in the January 2018 issue.