Most economists missed the signs of the Financial Crisis of 2008. There is now an international manhunt for clues of the economy’s health. According to the Atlantic, RV shipments are a pretty good predictor:
RV sales turn out to be a pretty good predictor too: When RV sales are doing well, the economy follows; when RV sales tank, the economy is soon to tank too … The RV industry has repeatedly fallen in advance of more widespread economic troubles. RV sales started dropping in 1999; the economy did not crash until 2001. Between 2006 and 2007, RV sales again dropped—this time 9.5 percent. The GDP still grew in that period, at an annual rate of 4.5 percent. But between 2007 and 2009 GDP growth slowed to 1.7 percent, and dropped 2 percent between 2008 and 2009.
In fact, RV sales track closely with the Conference Board’s Leading Economic Index, an oft-used measure that pulls together a series of factors, including average weekly hours in manufacturing, building permits issued, average weekly claims for unemployment insurance, manufacturers’ new orders, stock prices, and average consumer expectations, to predict how the economy will fare.
Has The Next Recession Arrived?
It makes sense, given that RVs are big ticket items. Motor homes can cost as much at $90,000 – that involves labor and lots of material. They are also discretionary items that could be one of the first things consumers cut out if the economy falters.
RV shipments for October 2018 were in free fall, which could portend the next recession arrived next month. That may not bode well for RV-related names like Thor, Winnebago or LCI industries. Read more: