Boating Industry

January 2015

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26 | Boating Industry | January 2015 [ 2015 Industry Outlook ] www.BoatingIndustry.com for the year, which would make it the best year for job creation since 1999. (It's worth noting that wage growth continues to be stagnant, though.) Consumer confidence is on the upswing. The Thomson Reuters/University of Michigan's final November reading on the overall index on consumer sentiment came in at 88.8, its highest reading since July 2007. Gas prices stood at a national average of $2.80 a gallon at the end of November, 50 cents lower than a year earlier and the lowest level since October 2010. Not only does that address concerns potential buyers may have about the cost of fueling a boat, it also essentially creates more wealth for the average family. Through November, the lower prices have been the equivalent of a $75 billion tax cut for American households, estimates Goldman Sachs. With gas prices forecast to stay near current levels, the av- erage family will realize an additional $1,100 of available capital. Home values – which represent the larg- est asset for most families – continue to increase as well. The last several months of the S&P/ Case-Shiller National Home Price Index have shown prices settling in at about 5 percent ahead of 2013. That puts price gains in a much safer area than the unsustainable double-digit price increases of 2012 and early 2013 that fueled con- cerns of another housing bubble. Beyond the overall economy, new product is also helping to attract more people to boating. Talk to anyone who sells boats, and they'll tell you one of the biggest challenges was the lack of innovation from many manufacturers during the recession. With plenty of new boats rolled out at the Fort Lauderdale show last fall and big in- troductions planned by many builders for Miami in February, the good news is boat and engine manufacturers are investing again. "If you look at the industry over time, we're doing a much, much better job of delivering a quality product and a quality sales experi- ence than we were doing 10, 15 years ago," Dammrich said. Confident for 2015 With all that in mind, it shouldn't be a surprise that most in the industry are confident about their potential for growth in 2015. "I think we're going to have another year of growth," Dammrich said. "I'll conservatively estimate we'll probably see about 5 percent growth next year." Eighty-four percent of Boating Industry readers expect their revenue to be up in 2015 compared to 2014 – with 43 percent calling for growth of more than 10 percent. Only 5 percent expect their business to be down this year. In his conversations with NMMA members, Dammrich also hears an optimistic tone. "You talk to individual boat builders, they're projecting to be up 10, 12, 15 percent next year," he said. "Some of them will be, but they won't all be and the industry won't be." Survey respondents reported a number of reasons they're feeling confident about 2015, most centered around the draw of the boating lifestyle and an improving economy. (See sidebar on p. 25 for some of those insights.) Dammrich echoed that sentiment. "There's a basic human desire to be out on the water that will continue to propel our indus- try," he said. That's not to say there aren't challenges facing the industry. There's a plethora of gov- ernment and regulatory issues from ethanol to Magnuson-Stevens reauthorization to tax con- cerns. There are demographic challenges as it relates to the age and ethnicity of boaters. And, of course, the old reliable of affordability. (See the related article on p. 28 to see what several industry leaders see as the top chal- lenges for 2015.) Affordability tops the list of challenges for Boating Industry readers, just as it did in 2014. Nearly half of survey respondents said they were very concerned about affordability and its impact on boating, well ahead of every other issue. Thirty-two percent said they were very concerned about ethanol and its related issues. Competition from other activities (29 percent), aging boaters (25 percent) and water access (21 percent) rounded out the top five. Despite demographic changes in the popula- tion that make minority engagement a top prior- ity for many industry leaders, it's still not a major concern for most respondents. Only 9 percent said they were very concerned and 41 percent were unconcerned with the lack of minorities participating in boating. Visit BoatingIndustry.com for more insights and data for 2015. "There's a basic human desire to be out on the water that will continue to propel our industry." — Thom Dammrich

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