The RV Industry Association’s quarterly forecast report, RoadSigns, has a new author for the first time in decades.
Dr. Richard Curtin with the University of Michigan had been researching the RV market for RVIA since 1979, but last year he announced he would be stepping aside after the Summer 2020 RoadSigns report came out.
And so, the fall RoadSigns report, published in September, was the first one for Manchester, N.H.-based ITR Economics.
ITR was one of four economic forecasting firms that bid for the RVIA contract, and the RVIA’s Market Information and Executive committees ultimately chose it, noting at the time that ITR is the oldest, privately held, continuously-operating economic research and consulting firm in the United States.
The methodology ITR uses to forecast for the RV industry is no different than what it employs for any of the multiple organizations and companies it works with.
According to Alex Chausovsky, senior business advisor with ITR, the company’s clientele is split approximately evenly between trade associations, such as RVIA and private companies. The latter may have someone like Chausovsky come in and give a presentation to a small gathering of a companies’ board of directors, or to a hotel ballroom full of employees gathered for an annual sales meeting.
The company claims a nearly 95 percent accuracy rating for its forecasts at one year out.
“There’s obviously the consistent messaging surrounding what’s going on in the economy as a whole, like when you’re talking about GDP and industrial production. Right now, our focus is on keeping people up to date on what is happening with the COVID-19 pandemic and the input that we’re seeing from the monthly and weekly leading indicators, so that we can kind of have a pulse on the development of the economy,” said Chausovsky, who’s done 70 presentations this year and had 16 scheduled for October. “But we always do try to tailor our presentations to be more specific to the particular industry that we’re tracking, with the underlying commonality being that all of these different sectors – whether you’re in the industrial domain, whether you’re consumer-facing, whether you’re financial, because we deal with a lot of insurance companies and banks and things of that nature – they all have their own business cycles, and it has some kind of relationship to the macroeconomic business cycle.”
ITR, which also has an office in Texas, employs approximately 50 people, Chausovsky said, with about a dozen staff members devoted strictly to research.
ITR tries to project trends three years out, he said, and relies on broader microeconomic indicators to help shape its forecasts. Each industry’s relationship to the overall economy is unique, Chausovsky said.
“There’s a lead-lag relationship that exists,” he said. “When we look at RV sales, they tend to have a very different relationship to the economy from a timing perspective than, say, non-residential construction. Typically, non-residential construction is something that lags the economy by about a year, and RV sales tend to be a little bit of a leading indicator sometimes because they tend to sense the state of the consumer, and there’s implications in that to the economy down the road.”
Granted, the COVID-19 pandemic is the primary driver behind RV sales this year, but taking the “big picture” approach that UTR does, Chausovsky said, allows for those things that are thrown out of whack by what he calls “black swan” events – some major disruption to the U.S. economy – to re-align and even themselves out in the long run.
“We’re still able to leverage the input from those indicators to be able to see into the future, even though a black swan event that nobody could have predicted has occurred,” he said.
“The main point that I would stress at this time for your readership is they need to be a data-driven decision maker right now. There’s a great deal of fear, uncertainty.” Chausovsky continued: “As they look forward to 2021, realize that there’s going to be a rise in the U.S. economy; they need to be thinking now, ‘How do I best position my business to take advantage of that rise? That’s the kind of position I would implore your readers to have right now.”
