May registrations dipped 0.6 percent versus the main powerboat categories and 1.1 percent overall versus May 2018 — a somewhat pleasant surprise as the country was drenched with one of the wettest months on record.
Registrations declined year-over-year on a 12-month rolling basis 3.9 percent in the main powerboat categories, and 2.1 percent overall, according to May registration data from Statistical Surveys Inc., a Michigan firm that tracks new boat registrations.
May’s preliminary data came from 26 states, representing almost 55 percent of the U.S. market.
Ski and wake boats registrations continued to thrive with 9.1 percent growth over May 2018, and 6.2 percent growth on a rolling 12-month basis.
Fiberglass outboard-powered boat registrations also grew 4.6 percent versus last year after a few months of declines; the category is down 1.8 percent on a rolling 12-month basis, the data showed.
Yachts 41 to 65 feet had large increases as well — 80 registered this May compared to 55 last year during the month — a 45.5 percent increase. Semi-custom and custom yachts above 65 feet also saw 15.4 percent growth, with 15 sold versus 13 last May.
Aluminum fishing boats continued their decline, again perhaps due to the unusually wet spring. The category was down 6.2 percent compared to last May, and was off nearly 11 percent on a rolling 12-month basis.
“We believe that any adverse weather impact on dealer traffic is more than likely to impact the smaller impulse-purchase boats — with aluminum fish falling squarely into that camp and most likely to see a benefit when the weather breaks on a more consistent basis,” wrote B. Riley analyst Eric Wold about the May data.
Pontoons also experienced softness with a 2.2 percent decline in registrations compared to May 2018, but remained positive at 0.2 percent growth year-to-date.
PWC registrations grew 6.5 percent versus last year, and was up 8.8 percent year-to-date.
May is typically the most significant month at 16 percent of retail, said Wells Fargo analyst Timothy Conder.
“We believe May results were generally in-line [or] slightly better than expectations given continued elevated precipitation,” wrote Conder in a report, pointing out that precipitation levels year-to-date in May were near the highest on record.
Near-term pent-up U.S. demand appears satisfied, all collectively compounded by unfavorable year-to-date Midwest, Northern and Canadian weather, said Conder.
“Positively, we believe Memorial Day weekend and the first week in June saw better trends, but we are still waiting on inflection point in the value segment,” wrote Conder. “Channel inventory levels need to be closely monitored with likely negative implications to wholesale [the second half of 2019]. Similar to 2014, June [and] July — collectively 27 percent of annual retail — are now even more critical retail months.”
Poor weather might have impacted deliveries from May purchases, and delayed registration, said Wold.
Nevertheless, Wells Fargo believes the industry is about 10 percent over-inventoried.
“We believe the situation will require lower wholesale [in the second half of 2019] and retail pick-up in June [and] July to correct,” said Conder. “Channel inventory aging is at an all-time low, but still up year-over-year in dollars. The most work is needed in saltwater fishing and pontoons. We believe OEMs have already slowed wholesale shipments to proactively address any channel risks.”
Wells Fargo expects 2019 retail units to be down between 1 and 2 percent, versus the previous forecast of being up that amount. It also projects retail dollars to be up between 3 and 5 percent for the year.