A host of global challenges — a U.S. trade war with China, a “messy Brexit,” and the threat of recession in Germany — are affecting superyacht and yacht sales, according to a report by Bloomberg news.
Confidence has to be strong to buy a large luxury vessel, yacht salesman Thom Conboy told the news outlet at the Fort Lauderdale International Boat Show.
“If this political thing keeps going in this muddy trench that it’s in, it’s not going to help us,” Conboy told Bloomberg.
Discretionary purchases like boat and recreational-equipment sales can be a solid barometer of the overall economy, Michael Skordeles, head of U.S. macro strategy at SunTrust Banks Inc., told the news service. (Skordeles still believes the United States will avoid a recession at least through 2020 because of strong job and wage numbers.)
Superyacht builders had only sold 102 new projects through the first nine months of this year and appear likely to fall well short of the 199 they sold last year, SuperYacht Times reported, according to Bloomberg.
Some segments have dropped up to 7 percent this year. Many in the industry hope the dip was caused by poor Spring weather rather than a potential recession, but a larger dip in RV sales raises the question of whether rising prices due to tariffs have played a role.
Powerboat sales should hit their second-highest level in 12 years, according to the National Marine Manufacturers Association, and several brokers reported strong sales at FLIBS. Personal watercraft sales have remained brisk, but categories like pontoon and saltwater fishing boats have turned negative recently.
The largest category, freshwater fishing boats, dropped by around 6 percent each month this summer, according to Bloomberg, citing NMMA data.
Longbow Research analyst David MacGregor, who recently downgraded Brunswick and MarineMax to neutral ratings, thinks there’s enough evidence now that things are slowing down.
And next year, the U.S. presidential election is expected to further affect sales negatively. During the last election, Bob Denison at Denison Yachting researched buying trends and found boat sales dropped off by about 5 percent in the months leading up to the election; the largest drop was seen in boats over 50 feet.