Pump Prices Not the Only Factor

In a recent poll conducted by Boating Industry and RBC Capital Markets, dealers said their No. 1 concern going into the 2011 season was rising fuel prices.
However, fuel prices may not play as big a role as other economic factors.
In August 2008, at the start of the recession and the height of the last spike in gas prices, the National Marine Manufacturers Association and Michigan State University’s Recreational Marine Research Center conducted a survey of 2,211 powerboat owners who went boating between January and July 2008. The survey found that 99 percent continued to go boating in 2008 despite rising fuel prices. In fact, NMMA says boating participation increased six percent in 2008 to 70 million.
“We expect boaters to continue boating this summer as economic indicators which impact boating habits, such as consumer confidence and consumer spending, are faring much better than they were three years ago when we last saw $4 per gallon fuel prices,” NMMA?President Thom Dammrich said in a release describing its latest Recreational Boating Statistical Abstract. Dammrich said boaters typically find ways to adjust to fuel price increases, and good weather and favorable conditions usually overshadow fuel prices.
The graph below shows how boat registrations have fared in the past few years as gas prices rose, fell, and then rose again. Relatively high gas prices did not appear to derail sales in 2007 — it wasn’t until the recession hit in 2008 that sales really took a turn for the worse.
Thus, marine businesses may want to also consider other local and national indicators when making decisions about 2011. For a view of how GDP affects boat sales, see “Looking back to predict the future,” October 2010, or go online to tinyurl.com/boating-GDP.