Newspapers and television news have pointed to declines in the shipments of recreational vehicles as a warning signal of a forthcoming national recession.
It’s true that nationally RV shipments are down. They have been declining, compared to the same month a year earlier, each month from August 2018 through July of this year.
For the year as a whole, shipments in 2018 were 4.1 percent below 2017. However, 2017 was a bonanza year for the industry, shipping 504,600 units, up 17.2 percent from 2016. Yet that does not tell the story well; in March 2018 alone, shipments reached 50,600 units, a vertigo height for RVs.
That strength started to weaken in May 2018 and went into a full slide as the year progressed. By December 2018, the month-over-same-month figures were down by 21.7 percent.
The New Year saw no improvement. Whereas March 2018 shipments topped 50,000, that same month in 2019 found monthly shipments down below 40,000. Through July, seven months into 2019, shipments were off 63,500 units or 20.6 percent.
The Wall Street Journal and the business TV shows were calling around to hear “experts” discuss the likelihood of a recession. They believed, “As goes Elkhart County, so goes the nation.”
National Public Radio got on the story and local Indiana journalist wished they had saved the Rolodex cards left by their predecessors. “All this has happened before,” they told readers and listeners. “There were three years in a row, 2007, ’08 and ’09, when RV shipments fell by a total of 225,000 units or 42 percent, followed by the Great Recession of 2008-09.”
Yes, they had their facts; or did they? The three consecutive years (1989-91) of falling RV shipments did not fore-shadow a recession, although the economy did sniffle. Over the 37 years for which the Recreational Vehicle Industry Association (RVIA) carries shipment data on its website, the industry recorded declines in 11 years. During the same period, Gross Domestic Product (GDP), adjusted for inflation, fell only four times.
Are we headed for a recession now? Not on the basis of RV shipments alone. It would be nice to have a reliable forecasting canary.
But no canary and no RV shipments have ever caused a disaster. At best they tell us to take note of all those other factors, economic, political, and environmental which are better indicators of where we are going.
As for forecasting the RV industry, we might learn something from the retail value of shipments data on the RVIA web site. Adjusted for price changes, the average RV in 2018 sold for $38,449, an 18 percent drop from the peak of $47,054 in 2004. Should Hoosiers be concerned about this decline in the value of our “Bellwether” industry?