Good afternoon,
If you have driven by Elkhart, Indiana, you can’t help but notice the fleets of recreational vehicles and travel trailers parked outside assembly plants awaiting shipment
The city, a short drive from the University of Notre Dame’s hometown of South Bend, is the world’s RV Capital and home to the RV/MH Hall of Fame and Museum.
Right now, Elkhart is in the spotlight as pundits and the media look for signs of a recession.
The Wall Street Journal (subscription) and the Indianapolis Star recently wrote lengthy pieces on the downturn in the RV business.
Closer to home, Friday’s jobless report for Delaware showed a one-tenth of one percent increase in the unemployment rate, with labor market officials pointing to signs of a slowdown in job growth.
Earlier, Delaware auto dealer Mike Uffner (Delaware Cadillac) was quoted in a Morningstar (financial website) post on a slowing economy assaying that sales are holding up at the company’s dealerships in Wilmington and Dover. Uffner’s Chevrolet dealership gets at least a few sales from RV owners of heavy-duty pickups that pull big travel trailers.
The car business has its ups and downs for Uffner and other dealers, but RV sales are capable of heading off a cliff.
At one point during the last recession, Elkhart had a 19 percent jobless rate. The figure is now around 3 percent, up from the low twos.
So far, no alarms have sounded, but orders are down.
Some attribute the decline to overly optimistic sales projections and skittish consumers. Other see trade battles and tariffs as factors that could boost the cost of materials and parts.
Prices for luxury RVs and car-like resale values are another issue. The Journal reported that one traveling couple opted for a fixer-upper as an alternative to prices that can run a quarter of a million dollars or more
Overall consumer spending remains strong, but any signs of declining RV, boat and second homes would signal that tougher times are ahead.
So far, the boat industry is showing no signs of a big decline. Meanwhile, low-interest rates seem to keep the second home market perking along.
No Elkhart RV companies have issued WARN notices that are required for layoffs of 50 or more but make no mistake, you are sure to read or hear about the first one.
If this newsletter was passed along, sign up here to get your own five-day-a-week email report at no charge. – Doug Rainey, chief content officer.
