| While making my annual pilgrimage to the Miami Boat Show last week, I managed to grab a few minutes with Thom Dammrich, the president of the National Marine Manufacturers Association. The great thing about folks like Thom is that they can put some hard numbers to perceptions we have about things like the health of the boating industry.
While the Miami show is always glittering and glamorous, the impressions I had before strolling through the Miami Convention Center were mostly that boating was taking a whack from the souring economy. There just aren’t as many boats on the water as there have been in previous years and I know from personal experience that higher fuel prices are hurting a lot of boaters.
Sure enough, Thom told me that the NMMA is estimating that 2007 power boat sales were off about 14% in unit volume and were down about 9% in dollar volume. The culprits are the usual economic suspects: a sick housing market; declining consumer confidence over the past two years, partly attributable to that housing market; rising unemployment and, of course, those higher fuel prices. Thom expects those conditions to continue through the first several months of this year.
But he also had some good news. With the Federal Reserve slashing interest rates in a bid to get the economy bubbling again, he’s predicting that business will pick up later this year, fueled by “pent-up demand” as consumer confidence rises and employment begins to grow again. That’s a lot more optimistic view than I get from a bunch of academic and government economists, who aren’t looking for things to turn around until 2009 or 2010. I sure hope Thom is right. In the meantime, however, the weak dollar, which makes American-made products cheaper for foreigners, is having a strong impact on exports of U.S.-made boats. Exports in 2007 totaled $2.164 billion, up from $1.747 in 2006. “It’s like we’re having a giant clearance sale,” he said.
All of this is important not only to us boaters, who obviously have a direct interest in the health of the industry, but to the U.S. economy, too. The NMMA counts more than 1,000 American boat builders that provide jobs for some 114,000 workers. There are also 12,000 marines with about 800,000 slips and 5,000 boat dealers. Altogether the various businesses related to boating provide employment to an estimated 990,000 people. Altogether the United States represents 50% of the worldwide recreational boating business. If you want to talk about American industries that are competitive on a global basis, boating is right at the top of the list. Let’s hope the boat business starts feeling better soon. |
