ITR report: Boatbuilding slowdown in 2020

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A recently released report from ITR Economics says that boatbuilding is expected to decline next year and rebound in 2021. NMMA’s Currents e-newsletter cited the report, saying that boatbuilding will dip by summer 2020, but it still will be on the same level as spring 2019.

Trade Only Today was unable to cite data from the report because of contractual agreements between the National Marine Manufacturers Association and ITR Economics. NMMA commissioned the study for its members.

NMMA President Thom Dammrich told Trade Only Today that ITR was forecasting two years ago a “slowdown in boat production” in 2020. “Their latest forecast is that while things are slowing, we’re going to see a mild slowdown through most of next year,” he said. “Then, from the beginning of 2021 to the middle of 2022, they’re predicting very strong increases in sales.”

The ITR report does not break out boat categories such as aluminum and fiberglass, or different lengths. NMMA has worked with ITR for about seven years, and while Dammrich says that the industry hasn’t seen a downturn in sales during that period, the ITR economic analysis has been accurate.

“Production is going to flatten out but it’s not going to be terrible,” says Dammrich. “Even if sales are off 1 percent, it’s not a major event. We’ll still be at the same level as the spring of 2019.”

The NMMA president calls recent economic news about looming recessions “a lot of noise,” and says this year’s decline in sales could be attributed to weather, particularly in the Midwest. He also called “tariffs” a headwind for the industry.

“The sky is not falling,” Dammrich said. “The economy’s still growing at 2.5 percent. We’re not going to lose anybody through this little softness, especially if you manage your business correctly. It’s important to plan ahead for the business cycle in 2020.”

The industry has been “up” for eight consecutive years, so next year will be a question of managing inventory, says Dammrich. “We don’t want to be caught with growing inventory. Since the recession, the industry has been good at aligning inventory with boat sales. Next year it will be a question of having as much inventory as you need for sales.” 

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