ANNAPOLIS, Md. – A global economist said the economy “is bumping along surprisingly well” during an Oct. 5 panel discussion of sailing and industry speakers at Sail America’s General Members Meeting in Annapolis, Sail America reported in a recent statement.
“The economy is bumping along surprisingly well, given the headline risks from the subprime blowup, which was really about the sale and purchase of toxic products, which happens from time to time in a free economy,” said Dr. Douglas Love, executive vice president, CIO and treasurer for Investors Guaranty Fund, Ltd. While he said it was difficult to predict the future financial ripples stemming from the subprime crisis, Love thought the U.S. economy had absorbed the shocks and was moving forward.
Love spoke to a record crowd of 200 people during the discussion about sailing’s current and future outlook. He said the weakness in the U.S. dollar was beneficial to the U.S. sailing industry, even though it meant an increase in the cost of importing raw materials.
“The good news of it is that for the past three, four, five months or so, exports from the U.S. are growing at a rate of three times the rate of imports to the U.S., largely as a result of the lower dollar. So this is very good for exporting for all industries.”
Love also forecast a surging international demand for luxury yachts, as financial powers in London, Dubai, Stockholm and Shanghai come on strong.
During his travels abroad, Love said he is seeing a “real diffusion of the power of Wall Street across the globe. The share of market in securities trading and investment banking in London has now become a severe competitor to the U.S.,” he said. “Goldman Sachs (a global investment banking firm) for the first time last year made more profits in Europe and in Asia than it did in the U.S.”
He noted that, “In the U.S., it’s better to be in the sailing industry than in the automotive industry. I know you guys are down 10 percent year over year. I don’t see any big boosts coming out of that, but I think it won’t get any worse. It probably will go back to where it was.”
China an increasingly strong competitor
Increased global competition, especially from China, with its low-cost labor, has had an impact on the sailing industry, according to Sail America.
“China is helping us bring better value to the customer and we actually embrace it,” said Wayne Burdick, president of Beneteau USA. As a defense against China, Burdick said sailing manufacturers are driven to do a much better job by reducing “the labor component without taking quality out.”
Alistair Murray, Ronstan International managing director, said China “is changing the shape of what we do,” noting that the pressure from China, with its ability to produce low-cost stainless steel, has meant that the “portion of the market we’re now chasing is a lot smaller because of the pressure from China.” But he said that development has motivated Ronstan to concentrate on its strengths and accept the fact that “products with a high labor component are going to come from China, whether you like it or not.”
Looking to the industry’s future
Murray invited the audience to attend the next International Sailing Summit in Paris in December 2008. Murray, founder and chairman of the International Sailing Summit, said the theme of the summit would be learning and gaining new ideas from other industries, such as the golf industry.
Bill Goggins, Harken commercial manager, said it was “absolutely, 100-percent critical” to bring in a large volume of new consumers to sailing. As chair of Sail America’s marketing committee, he noted that Sail America had focused its resources on marketing campaigns through its Discover Sailing DVD, its public service advertising campaign in major magazines and newspapers and the Southam Awards, the annual editorial competition that honors journalists who carry sailing’s message to a mainstream, non-sailing audience.
Thom Dammrich, president of the National Marine Manufacturers Association (NMMA), said the “Discover Boating” multimedia consumer campaign, now in its second year, was working to generate new prospects for sailing and boating, as it gained increased visibility among consumers.
“It’s working,” he said. “We are getting not interested people interested in boating and our research shows it takes one to three years for someone to go from not interested to purchase.”
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