Editor’s note: Wells Fargo’s Economics Group recently published special commentary on the outlook for the RV industry. The report’s Executive Summary follows below, along with a link to the article in its entirety. Special thanks to Wells Fargo for allowing RV PRO to republish the Executive Summary.
The recreational vehicle (RV) industry in the United States took a severe hit during the Great Recession but has now recovered to a point that it has surpassed its pre-Great Recession level of sales (Figure 1). Furthermore, the industry is expected to continue to grow in the future as Baby Boomers continue to retire in large numbers. In this report, we take a look at what has happened since 1999, concentrating on the determinants for demand over the years. Specifically, we are interested in looking at any differences in the behavior and determinants of this industry before, during and after the Great Recession that could shed some light as to what we should expect for the future of this segment of consumer demand.
Off the bat, it is important, and not surprising, to mention that the most important factor determining the demand for RVs in the United States, according to our analysis, is real per capita net worth. Furthermore, the effect of real per capital net worth is the only determinant of demand for RVs where the importance does not change, even when looking at different time periods. Meanwhile, the price of RVs is an important determinant for the overall time period, but it loses some of its significance, in statistical terms, in other periods considered in our analysis. A similar situation occurs in regard to the price of homes, which we include in our analysis to convey the idea exposed by analysts in the industry. U.S. consumers used their homes either to help them finance the purchase of an RV or to take money out to purchase an RV.
To read this Wells Fargo report in its entirety, visit www.wellsfargo.com/economics.