In this blog, we’ll cover the latest RV and travel data and focus on some ominous signs for the RV industry, which could mean better deals for new buyers.
This Month’s Big Story
Although we have been pointing to a slowdown in RV production for a while, there are emerging signs that a downturn in the RV market is now happening. In the past few weeks, we have seen a significant RV manufacturer shut down a production line and layoff several hundred workers; we’ve seen a major RV parts manufacturer report a decline in results; we’ve seen dealer sentiment declining, we’ve seen a large RV retailer report lower sales volumes, and we’ve seen a significant decrease in wholesale production. I have also heard from a person who works delivering raw materials for RV manufacturing that orders are slowing significantly.
This is important to understand because it will adversely affect the value of both new and used RVs. This is potentially good news if you are thinking about buying your first RV, but not so good news for current owners or those of us who recently purchased an RV during the market highs. In general, declining prices due to oversupply mean a loss of investment value for current owners.
Keystone Shuts Down Laredo Line
First up, Keystone RV recently announced the closing of two plants in Goshen, Indiana. According to the South Bend Tribune, “Keystone RV has filed a notice with the Indiana Department of Workforce Development indicating that it intends to close two plants in the city, displacing 334 employees. In a letter to employees, Keystone told workers that the action is expected to be permanent and that it planned to offer seminars covering unemployment benefits and resume assistance.”
Dometic Reports Slowdown
RV News is reporting that Dometic is slowing the production of RV components. “Dometic reported a slowdown in RV manufacturing in its second-quarter financial statement Friday. The supplier also will embark on a global restructuring expected to affect about 700 employees. Dometic has about 9,000 global employees.” Dometic CEO Juan Vargues commented, “The current macroeconomic situation brings uncertainty and is leading to a weakening demand in the short term.”
Dealer Sentiment Declines
On top of slowdowns in production, RV dealers have become more pessimistic about the industry’s current condition. RV Business is reporting declining dealer sentiment, with a score of only 26 out of 100 on current conditions and a 47 on the 3–5-year outlook. Current conditions are down significantly from May, when the score was 57 out of 100. The 3–5-year outlook has risen to 47 from 39 in May, so generally, dealers are losing optimism in the short term but are slightly more optimistic longer term.
Lazydays RV
Large RV dealer holding company Lazydays is reporting just shy of a 4% decline in unit sales for the second quarter of 2022 vs. 2021. While not a huge drop in unit sales, it is a decline, showing that demand is waning for RVs in general. The second quarter is April through June, so likely sales declined more later in the quarter, given gas and food prices increased more rapidly in May and June.
Production Numbers
On Monday, July 25th, the RVIA posted the latest RV shipment data for June 2022, and the numbers show a significant decline in shipments vs. June 2021. Volumes of RVs shipped are just under 45,000 units for June of 2022 vs. just under 51,000 units shipped in June of 2021, an 11.7% decrease. It’s evident that the breaks are being applied at RV manufacturers, especially for 5th wheels and travel trailers. Only higher-end Class B camper vans and truck campers continued to set shipment records.
Spotlight
Have you ever wanted to visit our amazing National Parks but are unsure when to go? One of the tools we maintain on johnmarucci.com is the National Parks visitor data by month, so you can research when any National Park and any Park Service property is most and least busy. This data visualization has all National Park Service properties and not just National Parks, so if you want to visit historic battlefields, or national monuments, for example, you can see the best time to visit. Just visit our Resources page to use the tool.
RV Trader
New and used RVs for sale on RVTrader.com are historically high, with new units pulling back slightly this past week. There were 214,163 units for sale as of July 27th. This is down slightly from the 218,333 units a month ago, which is alarmingly high for this time of year. While new units for sale are staying stubbornly high, used units for sale are also remaining high, with just under 54,000 units. This is now the fourth month in a row with used for-sale units at greater than 50,000. This time last year, the number of used RVs for sale was only 37,600. So, there has been an increase of just over 16,000 used RVs for sale year over year.
Even higher-end RVs are starting to see a pullback. For some time, we have been tracking Airstream inventory at Colonial Airstream, one of the nation’s larger Airstream dealers, and noticed total inventory has dropped by almost 30% in the 90 days since late April. While there is still a strong order book at Colonial, inflation and the fall in the stock market are likely affecting orders for more expensive units, like Airstreams.
RV Quality Concerns
Meanwhile, manufacturing employment levels in Elkhart County, Indiana, continue to be strong, with 79,100 people employed in manufacturing in June, according to the Bureau of Labor Statistics. This gives Elkhart a low unemployment rate of only 2.3% for June 2022, yet up from 1.8% in May. As mentioned above, this past week was the first time there was news of layoffs at RV plants in the greater Elkhart area in several years. RV build quality is likely correlated to the unemployment rate, so now is still not the best time for consumers to buy RVs.
AAA
Gas prices are staying stubbornly high and have just recently retreated below the $5 mark nationally. The current price as of July 27th was $4.302 per gallon, almost 60 cents lower than a month ago and $1.14 higher than a year ago. An RV trip of 3,000 miles at 10 mpg would cost $1,291 now vs. $947 a year ago, about a 36% increase.
Good News
For our final segment, there is a great story from the National Park Service website about a dog rescue at Pictured Rocks National Lakeshore in Michigan’s Upper Peninsula. “On July 8th, 2022, a dog visiting Miners Castle jumped over the railing at the lower overlook and fell straight down the cliff to a ledge 25-30 feet below.
Park rangers in the area heard a child scream and ran to the lower platform to investigate. The 4-year-old cocker spaniel – poodle mix named Leo was visible on a ledge, moving and limping around. Family members reassured Leo to stay put as additional park staff were called in, along with a volunteer from the Superior High Angle Rescue Professionals (SHARP) team, to rescue the dog from this steep complicated section of Lake Superior shoreline.
SHARP member John Miller from Munising was lowered down to the ledge. Leo was barking and wagging his tail, but wouldn’t come to John. After about 25 minutes of coaxing and offering dog food, bread, and finally Goldfish crackers, Leo came to John and Chief Ranger Joe Hughes.
Once Leo was with rescuers, John was able to craft a makeshift harness from webbing to fit the dog and get him back on to the lower overlook platform to his waiting family.
“The parks shoreline can be very unforgiving from the cold water to the sheer cliffs and drop offs,” Chief Ranger Joe Hughes said. “By partnering with the highly trained mountaineering guides on SHARP, we are able to safely effect these types of high angle rescues here at the park.”
The Wisconsin family was very thankful, and they were going to buy Leo a harness. Leo was leashed, but slipped out of his collar when he reached the end of the leash as he fell.
Okay, that’ll do it!
All the best in your camping endeavors!
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