“This Is The Worse I’ve Seen It” – Recession Imminent As RV Industry Crashes
08/21/2019
BY STILLNESS IN THE STORM
(Zero Hedge) To elaborate more on our July report titled “Trade War Chaos: Trump’s Tariffs Crash American RV Industry,” it seems the RV industry continues to flash a recessionary warning light.
Source – Zero Hedge
by Staff Writer, August 21st, 2019
The Wall Street Journal reports that Elkhart, Indiana, is the industrial hub of American RV manufacturing, has been used by analysts and economist as a leading indicator of consumer demand for luxury items.
Domestic shipments of RVs to dealers have plummeted 20% so far this year, compared to the same period last year, after dropping 4% in 2018, according to the Recreational Vehicle Industry Association.
Michael Hicks, a Ball State University economist who tracks the industry, warned that the fall in RV shipments could indicate a broader economic downturn is ahead. Hicks said shipments had fallen sharply just before the last three U.S. recessions.
Hicks said, “the RV industry is better at calling recessions than economists are.”
He said weakening consumer demand for RVs coupled with increasing vehicle prices due to tariffs suggests the economy is headed for a downturn.
Nearly two-thirds of recreational vehicles in the US are manufactured in the Elkhart region, as well as other durable goods. Elkhart ships its RVs to dealers across the country, who are sensitive to demand and are cautious not to order too much inventory. Any pullback by the consumer can instantly ripple through the supply chain back into Elkhart manufacturing plants.
“Elkhart is very distinctive because it is so highly dependent on the RV industry,” said Morton Marcus, a retired economist formerly at Indiana University’s Kelley School of Business. “As a result, it tends to be very cyclical with the kind of product consumers can very easily say, no that’s too big a ticket item for me to buy this year.”
The slowdown has already ticked up the unemployment rate in Elkhart County, which has a population of 200,000, was 3% in June, up from 2.1% last April. Weekly hours worked dropped a 1/2 percent in June.
In the last recession, Elkhart’s unemployment rate soared to 20% in 2009.
Thor Industries commands 50% of the North America RV market, recently reported its sales dropped 23% in its fiscal third quarter, which ended in April, compared to a year ago. Production cuts and layoffs have been in full swing at some of Thor’s North American plants.
Thor assembler Demiris Jahmal Williams told Reuters his hours were slashed, and his factory has been shut down through July.
“This is the worse I’ve seen it,” he said.
Managers at RV manufacturers and suppliers said President Trump’s trade war sparked the slowdown in Elkhart.
“The tariff price increases are what tipped the RV business — it started the landslide, no question,” said Tom Bond, the materials and purchasing manager at Adnik Manufacturing, an Elkhart-based division of Norco Industries.
Baird analyst Craig Kennison estimates retail sales of RVs this year could be down mid-to-high single digits and expects a similar decline next year.
And according to Hick’s comments, the next recession may have already arrived with declining RV shipments expected to fall for 2019 and 2020.
Source: Stillness in the Storm
______________________________________________________
If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we'll forward your request to the author.
______________________________________________________
All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.
Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.
Copyright © 2019 Dinar Chronicles
08/21/2019
BY STILLNESS IN THE STORM
(Zero Hedge) To elaborate more on our July report titled “Trade War Chaos: Trump’s Tariffs Crash American RV Industry,” it seems the RV industry continues to flash a recessionary warning light.
Source – Zero Hedge
by Staff Writer, August 21st, 2019
The Wall Street Journal reports that Elkhart, Indiana, is the industrial hub of American RV manufacturing, has been used by analysts and economist as a leading indicator of consumer demand for luxury items.
Domestic shipments of RVs to dealers have plummeted 20% so far this year, compared to the same period last year, after dropping 4% in 2018, according to the Recreational Vehicle Industry Association.
Michael Hicks, a Ball State University economist who tracks the industry, warned that the fall in RV shipments could indicate a broader economic downturn is ahead. Hicks said shipments had fallen sharply just before the last three U.S. recessions.
Hicks said, “the RV industry is better at calling recessions than economists are.”
He said weakening consumer demand for RVs coupled with increasing vehicle prices due to tariffs suggests the economy is headed for a downturn.
Nearly two-thirds of recreational vehicles in the US are manufactured in the Elkhart region, as well as other durable goods. Elkhart ships its RVs to dealers across the country, who are sensitive to demand and are cautious not to order too much inventory. Any pullback by the consumer can instantly ripple through the supply chain back into Elkhart manufacturing plants.
“Elkhart is very distinctive because it is so highly dependent on the RV industry,” said Morton Marcus, a retired economist formerly at Indiana University’s Kelley School of Business. “As a result, it tends to be very cyclical with the kind of product consumers can very easily say, no that’s too big a ticket item for me to buy this year.”
The slowdown has already ticked up the unemployment rate in Elkhart County, which has a population of 200,000, was 3% in June, up from 2.1% last April. Weekly hours worked dropped a 1/2 percent in June.
In the last recession, Elkhart’s unemployment rate soared to 20% in 2009.
Thor Industries commands 50% of the North America RV market, recently reported its sales dropped 23% in its fiscal third quarter, which ended in April, compared to a year ago. Production cuts and layoffs have been in full swing at some of Thor’s North American plants.
Thor assembler Demiris Jahmal Williams told Reuters his hours were slashed, and his factory has been shut down through July.
“This is the worse I’ve seen it,” he said.
Managers at RV manufacturers and suppliers said President Trump’s trade war sparked the slowdown in Elkhart.
“The tariff price increases are what tipped the RV business — it started the landslide, no question,” said Tom Bond, the materials and purchasing manager at Adnik Manufacturing, an Elkhart-based division of Norco Industries.
Baird analyst Craig Kennison estimates retail sales of RVs this year could be down mid-to-high single digits and expects a similar decline next year.
And according to Hick’s comments, the next recession may have already arrived with declining RV shipments expected to fall for 2019 and 2020.
Source: Stillness in the Storm
______________________________________________________
If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we'll forward your request to the author.
______________________________________________________
All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.
Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.
Copyright © 2019 Dinar Chronicles
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