After 14 months of reducing inventories, the National Marine Manufacturers Association (NMMA) is advising the recreational boating industry to keep apprised of current economic conditions to make sure their inventories dont fall too low to meet demand in 2002.
In June 2000, inventory across the industry was building up as wholesale shipments exceeded retail sales by 10 percent. That prompted NMMA to issue an alert that members should monitor inventories. That trend reversed itself in the first six months of 2001, and through June retail sales outpaced wholesale shipments by 9 percent, NMMA said.
“At the current inventory levels, the industry may be in danger of being unable to meet the demand for boat sales that we anticipate for the first six months of 2002,” said NMMA President Thom Dammrich. Dammrich said the industry is poised for recovery in 2002 based on key economic factors that have an impact on sales, including interest rates and the Conference Boards Consumer Confidence Index. When the interest rate is below 5 percent, Dammrich said, boat sales perform well, all other things being equal. Currently, the rate is at 2 percent (and is expected to move a quarter-point lower this week).
Meanwhile, personal spending was up 2.9 percent in October, an indication of renewed optimism by consumers. “Dealers should monitor the Conference Boards Consumer Confidence Index almost on a weekly basis. Any improvement in this index should spell good news for the boating industry,” said Dammrich.
In addition, Dammrich said, the renewed emphasis on family after the 11 September terrorist attacks and the dramatic drop in fuel prices over the last few months were weighed into NMMAs prognosis for an improving boat market. “Consumer studies performed since the attacks show that Americans are putting family at the top of their priority list. This plays well for boating, which is all about time spent with family and friends,” said Dammrich.
NMMA planned to announce final industry sales figures for 2001 during the first week of January in its Boating 2001 Facts & Figures report. For more of the latest industry news and information related to this story, log on to www.boating-industry.com.