Dealer sentiment regarding market conditions dropped to 25 in June, the lowest rating ever in the Pulse Report survey and a sharp drop from the 40 rating in May.
Also, the three- to five-year outlook dropped from 39 to 36 among the 75 dealers that respond to the Pulse Report survey, which is conducted by Baird and the Marine Retailers Association of the Americas.
More retailers reported declines than growth in June, with 59 percent saying trends had worsened from May and 25 percent saying they’d improved. In the used boat market, trends also turned negative, with 48 percent reporting a decline against 30 percent reporting growth.
“We are witnessing a slowdown as this overheated economy cools down because of political uncertainties,” wrote one survey respondent.
Dealers grappled with poor weather through much of June, prompting the lowest weather metric in survey history.
New-boat inventory comfort worsened sequentially, likely connected with weaker retail. Far more dealers — 73 percent — reported that inventory is “too high”; only 6 percent said it was too low.
“Be careful with inventory levels of new boats,” wrote one dealer. “Dealers need to stay on their toes and be careful about taking too much.”
Dealers said weather had the largest negative impact on sales, with 58 percent saying it had deterred sales in the first half of the year, compared with 8 percent that said it had been a positive factor. Though bad in both quarters, dealers said the second-quarter impact had been greater.
“Weather isn't much of an issue in the first quarter because people aren't anticipating boating during that time anyway; it's about the upcoming summer,” wrote one respondent. “Once boating season arrives, sunshine is the biggest driver of traffic.”
Several said customers were citing tariffs as a reason not to buy. “A typical retail customer comment: ‘I’m not buying anything until the tariff issue is resolved; my investments hinge on a good outcome, and it is now in jeopardy,’ ” said one dealer.
“After a slow start to 2019, we figured trends might improve as weather improved,” wrote Craig Kennison in the report. “But with about 60 percent of the season now complete, it is becoming more likely that sales are missed versus delayed, meaning any pickup in demand is unlikely to move the needle for 2019. While weather is an issue, commentary this month also reflects broader concern on the economy, consumers, and trade negotiations.”