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The Glass is Still Half Full

May boat registrations were down sharply but show a normalizing to prepandemic levels
Aluminum, Fiberglass Markets at a Glance

Aluminum, Fiberglass Markets at a Glance

Volumes of new powerboats, aluminum boats and personal watercraft in the United States continued a downward trajectory in May, according to a survey of state boat registration data.

All eight categories of powerboats experienced double-digit percentage declines in May compared with May 2021, according to the monthly report by Statistical Surveys, a Michigan firm that tracks new-boat registrations.

Aluminum fishing boats, bowrider/deckboats, cruisers, and two yacht categories each declined by at least 25 percent, Statistical Surveys found. The May survey included data from 28 states, representing approximately 67.8 percent of the U.S. boat market.

In total, 11 of the 15 boat categories tracked in the survey experienced declines. The steepest drop was a 37.5 percent reduction in registrations of 66-plus-foot semicustom and custom yachts. Aluminum fish and general recreation registrations were down 25.2 percent and 24.5 percent, respectively. PWC volumes fell 16.6 percent.

Chad Lyon, commercial leader at Wells Fargo Distribution Finance Marine Group, said the monthly totals show declines mainly because the year-earlier volumes were abnormally high after the Covid-19 pandemic motivated Americans to invest in outdoor leisure activities. Lyon said current boat sales are reverting to an approximate normalization to prepandemic levels. However, macroeconomic concerns may be starting to influence purchasing decisions and cause some buyers to hesitate, he said.

“There is a little bit of softening in current demand that I think has its roots in the economic outlook,” Lyon told Soundings Trade Only. “We did hear from customers that some of the activity from some of the boat shows did start to slow. That’s where you see the inflation pressure take hold.”

Lyon said this year’s spike in gasoline prices should not severely deter new-boat sales because consumers who can afford to buy a new boat usually can, and are willing to, absorb higher fuel prices. Overall inflation, however, and especially the plunge in the stock market in the second quarter, probably exerted influence on purchasing decisions for some would-be boat buyers.

Bucking the downward trend yet again was the sail category, which experienced a 10.2 percent rise in registrations in May compared with the May 2021 figures. Jetboats also rose slightly, along with electric boats. The number of houseboats more than doubled to nine from four.

The strongest powerboat category in May was fiberglass inshore/offshore, which declined by only 15 percent. Pontoon volumes, which fell 15.7 percent, also have held up better than others. The ski/wake category was off by 17.2 percent.

A continuing challenge in registering new boats is the lack of inventory from builders, which are still catching up with an earlier flurry of orders amid the slowdown in some aspects of their upstream supply chain.

“There is a little bit more inventory today than we had forecast,” Lyon said in late June, adding that there may not be any major inventory buildup until the fourth quarter of 2023.

That trend indicates a continuation of relative strength in recreational boating, and the monthly registrations may have seen the worst of their percentage declines, he added.

“The glass is still half full,” Lyon said. “We still think there will be stronger comps in the second half.” 

This article was originally published in the August 2022 issue.

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