RV Industry Faces A Tough 2019: Will 2020 Be Any Better?
Zacks Investment Research | Dec 29, 2019 09:19PM ET
The recreational vehicle (RV) industry is influenced by many strong macroeconomic factors and is extremely sensitive to overall strength of the economy, as buying an RV is a large discretionary purchase for the majority of customers. Some of the prominent players in the RV market include Thor Industries Inc. (NYSE:THO) , Winnebago Industries, Inc. (NYSE:WGO) , Forest River Inc., Camping World Holdings Inc. (NYSE:CWH) , Skyline Corporation (NYSE:SKY) , REV Group, Inc. (NYSE:REVG) and NeXus RV among others.
The RV industry took a massive hit during the 2008 recession but has enjoyed exponential growth since then. Aided by broader economic recovery and growing popularity of van life movement among millennials, the RV industry has recovered significantly, with total shipments surging around 192% from 2009 to 2018 timeframe.
Year 2018 saw the second highest RV unit shipments volume ever and the highest total retail value. Wholesale shipments ended 2018 with 483,672 units, witnessing 4.1% decline from the record level achieved in 2017.
Amid global recession worries, RV industry is feeling the pain, with shipments declining in 2019. However, things appear a little encouraging as head into 2020.
RV Shipments to Decline in Double Digits in 2019
Shipments of RV are anticipated to fall 16.9% year over year in 2019 to 402,100 units. Notably, the U.S.-Sino trade dispute and subsequent tariff war not only affected the economies of the United States and China but also slowed global economic growth. With the weakening of the economy, RV sales generally fall sharply, as consumers do not feel confident about making a large recreational purchase.
Towable RVs for 2019 are projected to be 355,600 units, down 19.8%, whereas motorhome shipments are expected to fall 19.2% year over year to 57,585 units.
Decline in RV Shipments to Abate in 2020
The RV Industry Association expects the double-digits percentage declines in wholesale shipments to ease significantly in 2020. It forecasts wholesale shipments to come in at 386,400 units in 2020, representing 3.9% decline year over year. Towable RVs and motorhome shipments are forecast to end 2020 with 344,400 and 42,000 units, respectively.
Compared to 2019, the year 2020 is expected to witness a much lower year-over-year decline in RV shipments on the back of improving U.S. economic growth and de-escalation in the trade fight between the world’s two largest economies, both of which saw positive updates recently in terms of business growth.
The U.S. economy is in good shape with a robust labor market, higher consumer spending and a dovish monetary stance taken by the Fed. Preliminary U.S.-China trade truce over import duties, mild relaxations in Brexit uncertainty and the Federal Reserve’s three consecutive rate cuts have boosted market sentiments and are likely to revive global economic growth.
RV Sales Have Slowed But Still Quite Strong
Indeed, RV shipments are likely to be lower than the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.