Boatbuilding is forecasted to plateau later this year, according to a group of economists who analyze the U.S. boating industry. ITR Economics issued a report on boatbuilding to NMMA members last week, saying that changes are expected.
This story by Michael Verdon originally appeared in Trade Only Today.
ITR economist Connor Lokar, who authored the report, told Trade Only Today that the forecast follows the group’s expectations for the U.S. economy at large.
“Boatbuilders saw double-digit growth rates in the last year and a half,” Lokar said. “It’s been their best stretch for many years, but we expect things to slow down. We’re expecting a softening in 2019 and early 2020.”
Lokar pointed to such signals as a weak fourth quarter for the stock markets, U.S. consumers “becoming a bit more apprehensive,” and a global economic slowdown giving builders pause later in the year.
The stock market “shock” of the fourth quarter could impact recreational sales going forward.
Lokar said there tends to be a two- or three-month lag between economic cycles and consumer purchases of big-ticket items, such as boats.
The economist group remains a “little concerned” that there might be excess inventory with boatbuilders as consumers “slow down” with recreational purchases. ITR expects the economic slowdown to be over a five- to six-quarter period, according to Lokar.