RV Sales Rebound as U.S. Economy Improves: EcoPulse

By Anna-Louise Jackson and Anthony Feld

When Tom Walworth and his wife planned a weekend getaway to Traverse City, Michigan, earlier this year with friends, they didn’t book a hotel. Instead, they rented an RV.

In addition to saving about $100 on food and lodging, Walworth got a taste of an activity he’s analyzed for more than 30 years as president of Statistical Surveys Inc., a research company based in Grand Rapids, Michigan.

“We were hooked; we had an absolute ball and would do it again,” he said.

More Americans are taking to the road in recreational vehicles as sales of towable campers approach pre-recession levels and shipments of motorized models gain speed. The total for all new units sold this year is projected to rise about 11 percent from last year to 316,300, Walworth said. Meanwhile, 2014 looks like “another good year,” as sales could top 335,000, the most in six years.

“All things are a go for the RV industry again,” he said.

That’s good news for manufacturers Thor Industries Inc. (THO) and Winnebago Industries Inc. (WGO) It’s also encouraging for the U.S. economy because RV demand has a “strong relationship” with household confidence, and these vehicles are “very discretionary” purchases, said Richard Curtin, director of consumer surveys at the University of Michigan in Ann Arbor, who has analyzed the industry for more than 30 years.

Turning Point

While demand for more-expensive motorized vehicles has been slower to recover than in previous expansions, 2013 marks a significant turning point, Curtin said. More than four years since the 18-month recession ended in June 2009, sales of these units -- with an entry-level price of about $80,000 -- are up more than 30 percent from last year, he said, citing data from the Recreation Vehicle Industry Association, a trade group. Meanwhile, towable units -- retailing for as little as $4,000 -- have risen 8.5 percent.

Courtesy:BLOOMBERG