Article about the RV industry and Recessions

[RetiredOne]

This caught my eye, as it talks about how the RV industry sales trends relate to recessions. Seems that sales levels are down more this year than last.

What also caught my eye was the picture they used in the article. Guess which manufacturer it was? Hint: it starts with "J".

....."Shipments of recreational vehicles to dealers have fallen about 20% so far this year, after a 4.1% drop last year, according to data from the RV Industry Association. Multiyear drops in shipments have preceded the last three recessions.
“The RV industry is better at calling recessions than economists are,” said Michael Hicks, an economist at Ball State University, in Muncie, Ind. Mr. Hicks says softening consumer demand for RVs coupled with rising vehicle prices due to tariffs suggests the economy is either in a recession or soon headed for one."




https://www.wsj.com/articles/one-cou...nd-11566207001

[sirrealone]

When we went to the camper show last fall, every dealer kept telling us that the prices were going to go up 10-15% because of all the tariffs. If prices went up, it would stand to reason that demand would fall. We ended up buying a used trailer, so I never followed up to see if prices did actually go up or if that was just a scare tactic, but something to consider anyway.

[AKRUEBBE]

That picture looks like it's their "rigorous" quality control center

[Murff]

As the RV industry sees sales slide, so has the auto builders.

A recession could be at hand. However, maybe everyone (or a majority) that want an RV or new vehicle already got what they wanted? You can overbuild thinking the wave will last but eventually, the wave hits the shore and stops!

Eveidence could show that people are heeding the economic signs and paying down debt and being prepared. Retail sales as we approach Christmas will tell.

History shows the tariffs seldom work in the long run. Mr. Negotiator will most likely repeat his party's economic policies. Everyone of them for the last 100 years, except two, have placed the nation into bad times for the general public.

Murff

[Woodworker]

Originally Posted by Murff

As the RV industry sees sales slide, so has the auto builders.

A recession could be at hand. However, maybe everyone (or a majority) that want an RV or new vehicle already got what they wanted? You can overbuild thinking the wave will last but eventually, the wave hits the shore and stops!

Eveidence could show that people are heeding the economic signs and paying down debt and being prepared. Retail sales as we approach Christmas will tell.

History shows the tariffs seldom work in the long run. Mr. Negotiator will most likely repeat his party's economic policies. Everyone of them for the last 100 years, except two, have placed the nation into bad times for the general public.

Murff

Auto builders are sliding but if you think about it Millenials if they get a drivers license isn't until they are in their middle 20's. We couldn't wait to start driving but nowadays the kids not so much

[TxLoser]

Originally Posted by AKRUEBBE

That picture looks like it's their "rigorous" quality control center

Note the lack of people.

[2edgesword]

Originally Posted by Murff

History shows the tariffs seldom work in the long run. Mr. Negotiator will most likely repeat his party's economic policies. Everyone of them for the last 100 years, except two, have placed the nation into bad times for the general public.

Murff

You may want to tell China and the countries in Europe that tariffs don't work. They both charge tariffs or VATs on goods imported from the U.S.

The question of whether these tariffs will work depends on who has the most to lose if the tariffs remain in place. China's economy has slowed to a 17 year low. Companies are moving production facilities out of China to avoid the U.S. tariffs.

One thing the Chinese have in their favor is a political system that is more stable then the system in the U.S. Their leadership doesn't have to worry about an election every four years and they very well would be willing to wait another year and deal with the suffering to see if Trump gets re-elected.

Another problem for American leadership is Americans want microwave solutions to every problem. This problem does not have a microwave solution. That said we have more leverage today then we will five years from now so if the tariffs don't cause China to stop the thief of intellectual property and open its markets now it's never going to happen.

[Scott_Trailer_Newbe]

Supply and demand. Tariffs have some impact, but remember the RV industry has been in overdrive for years. Several major manufacturers have opened new plants, or expanded. At some point the supply will exceed the demand, so a pull back is perfectly normal. Is a recession next? Given the record growth of the RV industry it would be unwise to make that connection.

[jpgale]

Originally Posted by 2edgesword

You may want to tell China and the countries in Europe that tariffs don't work. They both charge tariffs or VATs on goods imported from the U.S.

Just to be technical but VAT (Value Added Tax) is not a tariff, it is actually more like sales tax except it is not added at the register but in the price on the shelf. If you buy something large in Europe and you don't live there then you can get the VAT back in the airport. VAT is paid by the consumer but it is not required to actually import the goods. A tariff is a tax that is required to be paid by the importer before they can receive their good, then when sold to the consumer sales tax for VAT is added.

[2edgesword]

Originally Posted by jpgale

Just to be technical but VAT (Value Added Tax) is not a tariff, it is actually more like sales tax except it is not added at the register but in the price on the shelf. If you buy something large in Europe and you don't live there then you can get the VAT back in the airport. VAT is paid by the consumer but it is not required to actually import the goods. A tariff is a tax that is required to be paid by the importer before they can receive their good, then when sold to the consumer sales tax for VAT is added.

Putting aside the label, China and many other countries apply tariffs to keep products made domestically more competitive. They do work which is why other countries use them. We will have to wait and see if they work in this instance. Of course the short term impact in the U.S. will be higher prices for consumers. But there is also an immediate impact on production in China as demand decreases due to higher prices and/or production shifts to other countries where the tariffs don't apply.

My doubts about whether they will work rest more in the ability of the U.S. population to suffer the tariffs versus the Chinese government's ability to keep their economy together and their population suffer through the negative consequences caused by the tariffs.

[GABob]

Originally Posted by 2edgesword

You may want to tell China and the countries in Europe that tariffs don't work. They both charge tariffs or VATs on goods imported from the U.S.

The question of whether these tariffs will work depends on who has the most to lose if the tariffs remain in place. China's economy has slowed to a 17 year low. Companies are moving production facilities out of China to avoid the U.S. tariffs.

One thing the Chinese have in their favor is a political system that is more stable then the system in the U.S. Their leadership doesn't have to worry about an election every four years and they very well would be willing to wait another year and deal with the suffering to see if Trump gets re-elected.

Another problem for American leadership is Americans want microwave solutions to every problem. This problem does not have a microwave solution. That said we have more leverage today then we will five years from now so if the tariffs don't cause China to stop the thief of intellectual property and open its markets now it's never going to happen.

Well stated. Would like to avoid a political argument, but I can tell you it truly is about time that we took a stance against what we’ve allowed China to do to us. To your point, it’s really the Chinese gov’t, not the Chinese people. I say that after having lived there for a few years.

Predictions of rising costs, while may be true to some extent, is also an excuse to make additional markup on their side. This is similar to a camel falling to its knees in Saudi Arabia, and the price of gas goes up 10%

[2edgesword]

Originally Posted by GABob

Well stated. Would like to avoid a political argument, but I can tell you it truly is about time that we took a stance against what we’ve allowed China to do to us. To your point, it’s really the Chinese gov’t, not the Chinese people. I say that after having lived there for a few years.

Predictions of rising costs, while may be true to some extent, is also an excuse to make additional markup on their side. This is similar to a camel falling to its knees in Saudi Arabia, and the price of gas goes up 10%

I agree that it's not the Chinese people but the government. Unfortunately that works against us in this situation because the government is more than willing to allow people to suffer to advance their economic and extension of power goals versus the typical U.S. politician who needs to get elected every two or four years.

As mentioned before, I believe if we're ever going to see a change for the better from the U.S. perspective it's now or never.

[gypsmjim]

The last few recessions were ones that I closely observed. IMHO, they are caused by the politicians that "predict" one is coming because they are mad that the party in power is not theirs.

RV sales are not predicting a recession. All the BS TALK about a recession is causing the sales to go down.

I'm not rich, but I'm not poor either. A 10% increase in an RV cost, for us, would have amounted to about $1500. I'd gladly pay that extra amount just to see some manufacturing jobs cut in China and added in the US.

There is (was) no "good" reason for US companies to farm work overseas, except to add to their already enormous profits due to greed.

Off soapbox now.

[Seek and Enjoy]

My only question in this debate is, how does fewer units effect quality of build? Are workers rushing less to get them out?

[RetiredOne]

Originally Posted by gypsmjim

There is (was) no "good" reason for US companies to farm work overseas, except to add to their already enormous profits due to greed.

Actually there is a good reason. They are just responding to their customers, who want to pay less, even if it is cheap China crap. Remember, Walmart didn't get so big by accident. We've done this to ourselves, giving up "quality" for "cost".

My only question in this debate is, how does fewer units effect quality of build? Are workers rushing less to get them out?

Someone here mentioned (I don't know if it's true) that many assemblers/installers get paid piece work instead of by the hour, so they rush to get the project done. Maybe with a slower work flow, they're taking more time?

[wags999]

After multiple years of record RV sales, it's not unexpected for sales to decline. it's very difficult to have record setting sales every year over a long period of time, even apple is seeing a drop in sales of new phones.



All that being said, there are people in this country that want a recession for political purposes, knowing, they would not be hurt. This in my mind is pure evil and treasonous.



Another part of the problem is, campground growth has not kept up with sales of RV's.. which makes it much less enjoyable to travel. Having just gotten home from an 11,157 mile trip, all across the country, it was amazing to see most campgrounds full or nearly full all the time.



Happy Camping

[jd99336]

RV industry may or may not be an indicator of recession. More reliable is the recent inversion of yield curve, high level of consumer debt and slow down in housing starts. I mostly look at 1st two. Prediction currently is recession in 18 to 36 months. Keep in mind a recession is something like two quarters of negative growth. Many will see lost of sales,profits.. some will benefit from slower price increases, and so forth. Not quite the same as a depression which tends to see all boats taking on water.

[Forelyndogs]

Glad someone else accurately described the VAT. It is not a tariff but essentially accomplishes the same thing our sales tax does. Europeans are often surprised when they learn that the shelf price of an item is not the sales price. VAT makes evaluating prices somewhat easier because the shelf price is what one pays. To tariffs, there are many historians and economists who claim the Great Depression was made much worse by tariffs. Like all economists theories, it’s possible to see the issue from different sides but there is considerable evidence that the Smoot-Hawley Tariff was a major contributor to deepening the depression. Why the President insists that the country against whom the tariffs are leveled pay them escapes me. Clearly, we the consumers pay them. I assume he has a logical reason for this statement, I just can’t find it.

[daveobieone]

I've gotta think that this RV market is approaching saturation.

That, combined with the realization by many that the newer they are, the sloppier they seem to be put together.

Why buy new (although I stupidly did this time) when the ones that are a few years older are put together better, the previous owner has likely fixed most of the problems, and they are much cheaper.

I doubt I'll ever buy a new RV again...the sloppy assembly quality being the #1 reason why. Thankfully, I've had a good dealer service dept experience.

Dave O.

[Crabman]

They have also raised prices on some models. the trailer I bought in 2016 the MSRP has increased by over 4 grand. There is likely resistance levels to certain price points which could be contributing to slower sales as well as the previously mentioned factors.