MIAMI — New-boat sales were up 5 to 6 percent in units and 8 to 9 percent in dollars in 2014 and are likely to increase by about the same amount in 2015, Bruce Van Wagoner said at an industry leadership conference that GE Capital hosted on Wednesday evening.
“Our business is in a safe position, better than it has been in a long, long time,” said Van Wagoner, president of GE Commercial Distribution Finance’s Marine Group.
Dealers’ operating expenses are going down, their revenue is going up and their inventories are in better shape than they have been in years. Just 10 percent of inventories were more than a year old and 3 percent were more than 1-1/2 years old in 2014. Dealer inventory turned over a little more than twice, on average, last year, which Van Wagoner said is a solid performance.
GE Capital loaned $5 billion to the marine industry last year.
Wagoner’s industry forecast parallels a positive one for the U.S. economy.
“The U.S. is going to be a net winner from the drop in oil prices,” said Rob Podorefsky, managing director of GE Capital’s Interest Rate Management Group. “It’s a win for the country and for the consumer.”
In December, less than 3 percent of consumer spending was going to gasoline purchases, a rate sufficiently low to boost consumer confidence and economic growth.
Podorefsky said shifting oil supply-and-demand dynamics could introduce some volatility in prices and monthly inflation. Four hundred oil rigs have been shut down in the United States because of the low prices, a development that will curb supply and eventually narrow the gap between supply and demand.
Podorefsky said the Federal Reserve is unlikely to raise interest rates significantly in the coming year.
“This Federal Reserve has no intention of derailing the recovery,” he said.
Fed rate hikes are intended to cool inflation, but a review of history suggests that recessions often follow them.
“I am convinced that this Federal Reserve is going to be rather modest in raising rates,” he said.