Boating Industry Rebound Projected, But Not This Year
Return to pre-recession levels a long way off, Freedonia says
Despite the worst contraction in nearly a half century, the recreational boating market will rebound from depressed 2009 levels and demand will rise more than 9 percent annually to reach $10.1 billion in 2014, according to a recent study of the U.S. recreational boating industry.
The decline has caused the industry to look for ways to gauge the “new normal.” This includes trying to figure out how far the demand for retail boating will recover, how much stock to maintain and, even more fundamentally, how many boat dealers and builders will survive, says “Recreational Boating: U.S. Industry Study with Forecasts for 2014 & 2019,” by The Freedonia Group.
Demand will be spurred by increases in spending and disposable income, and more consumers will be able to get credit for boat purchases once the financial markets recover. Increasing numbers of American age 55 to 64 will also fuel demand since this age bracket tends to purchase larger, more expensive boats, the study says.
“In addition, the industry’s effort to market the ‘boating lifestyle’ to women and minorities should expand the market,” it says. “However, even with the rapid sales growth, the market is not expected to recover to the pre-downturn levels until the end of the decade.”
The recreational boating industry was hit particularly hard by the factors that led to the overall downturn of the U.S. economy. Realities such as rising unemployment, sharp declines in house and stock values combined to reduce consumer spending and the ability of people to secure credit for boats. Many boat dealers also had difficulty obtaining financing to maintain stock and boat builders were unable to borrow money to pay for materials or their long-term debt, the Freedonia study said.
While demand in the recreational boating market (including boats, propulsion systems and accessories) is expected to rise by 9.3 percent annually, Freedonia projects that the actual demand for recreational boats will increase 10.2 percent annually, to $6.5 billion in 2014.
This increase will be driven by the recoveries of the economic and credit markets, as well as dealer restocking and pent-up demand from Americans who held off buying boats because of the downturn. The fastest gains will take place with powerboats, which experienced particularly sharp declines over the last two years, according to the study.
It said the fastest gains will be experienced in the West, where demand through 2014 will rise 11.1 percent per year, to $1.7 billion. The South will experience above-average growth during the period and remain the largest regional market, the study said.
For more information, visit www.freedoniagroup.com.
