Could we be in the midst of the new “good old days” without fully recognizing them? Perhaps. Time will tell, but you could certainly make a case for it.
In terms of dollars, the overall recreational marine industry is back to prerecession numbers. And measured in units, new pontoon and outboard boat sales have just about fully recovered to the levels they saw before the economy collapsed in 2008. Most of the other categories are hovering between 65 and 75 percent of their prerecession unit sales.
“We sold 1.2 million boats last year, including new and preowned,” NMMA president Thom Dammrich told me in an interview at IBEX in October. “That’s a lot of boats.”
After five-plus years of slow growth, a rosier forecast is on the table. New-boat sales should pick up steam, peaking in the first quarter of 2018 and continuing to grow for several years more.
Dammrich delivered that forecast from ITR Economics at the IBEX industry breakfast. He expanded on his remarks in an interview after the opening event.
“My sense is our sales are starting to accelerate,” said Dammrich. “There are really strong numbers being reported this year in a lot of segments and overall. Typically, the industry grows 5 or 6 percent. That’s about the best we can do.
“This year,” he continued, “it looks like our retail sales are going to be up 8, 9 or 10 percent [in units], which is just a blockbuster year for the marine industry. … I think we’ll look back and say, ‘These were really good times.’ ”
Dammrich also pointed to slowing growth in several related industries, such as automobiles and motorcycles. “I have this sense that we’ve reached a phase of acceleration as some other industries are starting to turn down a little bit,” he said. “Everything came back quicker than we did, and everything peaked sooner than we did. We haven’t peaked yet. And if you believe the ITR Economics forecast for us, we’re not going to peak until the first quarter of 2018, and we’re going to continue to grow well beyond that.”
After six years of growth (albeit slow growth), one might deem this marine cycle “long in the tooth” and perhaps expect a stall rather than an acceleration.
Is Dammrich surprised by the positive traction?
“Yes,” he said. “I think it’s stronger now than anyone expected it to be. I think it’s because there is momentum in the economy. There’s been very tepid growth out of the recession. But the forecast for the next four or five quarters is that we’re going to double [real GDP] growth into the 2 to 3 percent range instead of the 1 to 2 percent range.”
New-boat sales at the end of 2016 should be between 250,000 and 260,000 units for all categories, he noted.
“We’re seeing new-boat sales grow, while preowned boat sales are remaining fairly stable,” Dammrich said. “So we’re getting back to a more traditional balance of new versus preowned. We’re not there yet, but we’re getting there.”
Dammrich recounted a conversation he had in Chicago recently with a chief investment officer for a major bank. “He said, ‘Thom, if we stopped people on the street and talked to them, half of them will still think we’re in a recession because that’s all the media talks about — how bad things are,’ ” Dammrich recalled. “But he said, ‘I really believe we’re going to look back and [realize] this has been a golden age.’ ”
Dammrich agrees. “Overall, I think things are good. Housing is rebounding,” he said. “Everything is moving in the right direction. The RV industry is going to be back to unit levels not seen since the late ’70s [fueled in part by trailerable units]. Frankly, the Fed wouldn’t be talking about raising interest rates in December if the economy wasn’t in good shape.”
And, he continued, “Inventory levels at dealers are as lean as they’ve ever been.” In fact, he said, recent MRAA surveys suggest that even dealers are beginning to think inventory levels are too low.
“These are really good times in our industry,” Dammrich said, “and I think they’re going to continue for another two to three years, at least.”
For several years, Dammrich has advocated that the industry reach out to a younger, more diverse audience to replace the aging baby boomers. “Everybody wants a younger audience, but the disconnect is a younger audience is more diverse,” he said. And on that front, we still have a way to go.
Why doesn’t the industry focus more on marketing to non-traditional buyers, such as Hispanics?
“The perception is that they don’t have the money, they can’t afford it, which is a wrong-minded perception,” said Dammrich. “There are Caucasians who can’t afford to buy a boat, but you don’t classify all Caucasians as not being able to afford a boat. The same is true of other ethnic groups. Yes, there are people in those ethnic groups who can’t afford to buy a boat, but there are plenty of people in those ethnic groups who have money and can afford to buy a boat.”
In a nod to new Nobel laureate Bob Dylan, “The times, they are a-changin’.”
This article originally appeared in the November 2016 issue.