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2016 boating industry forecast

By Jonathan Sweet

Most segments, areas looking good for 2016

Sometimes there’s nothing wrong with being boring.

That may be the best way to sum up the state of the boating industry these days, with slow and steady growth becoming the norm the last several years. That trend looks to continue this year. Industry estimates put 2015 unit growth in the high single-digit percent range, with similar numbers expected for next year.

“2015 is going to go into the book as a pretty good year … and as we look at 2016, we’re looking for another strong year,” said Thom Dammrich, president of the National Marine Manufacturers Association.

Many of the broader economic indicators are healthy, which is helping the industry recover from the downturn.

Click image to view larger (Source: Boating Industry survey)

Click image to view larger (Source: Boating Industry survey)

“The economy, while not robustly strong, is still positive,” Dammrich said. “Fuel prices remain low. Interest rates remain low. There’s nothing negative happening to adversely affect boat sales in the coming year that we can see today.”

Dammrich also noted that there has been plenty of new product in the last year, which has also helped to drive sales.

Data from Info-Link, which tracks boat sales based on public registration data, shows sales up 9.3 percent through October on a rolling 12-month basis.

Click image to view larger (Source: Boating Industry survey)

Click image to view larger (Source: Boating Industry survey)

One of the best indicators of the state of the market is the days in inventory, which Info-Link monitors closely, said Peter Houseworth, Info-Link’s director of client services. Those numbers look healthy to this point.

“The distribution channel is clean,” he said. “That’s where it’s going to show up. I guess we did learn our lesson in that last downturn.”

Positive outlook

Most Boating Industry readers are also feeling good about the outlook for 2016. We surveyed the readers of our print and digital editions in November 2015. Respondents included boat dealers, manufacturers, marina owners and others working in the industry.

In that survey, 77 percent said they expect their revenue to increase this year. More than half of those companies expect revenue to increase by more than 10 percent for 2016. Only 4 percent expect their revenue to decrease.

Almost as large a majority grew business in 2015, with 71 percent of survey respondents saying their revenue increased for the year. About 13 percent of readers reported a decline, while 16 percent said business was flat in 2015.

Click image to view larger (Source: Boating Industry survey)

Click image to view larger (Source: Boating Industry survey)

The recovery has certainly not been universal, though.

“When you look at it in the macro view, it’s modest steady growth, but it varies greatly by segment and geography,” Houseworth said.

Info-Link provided Boating Industry with analysis of sales numbers from 2010 to 2015 to measure the recovery. The numbers confirm what many would expect, with pontoons (up 75 percent), saltwater fish (up 58 percent) and ski/wake (up 54 percent) performing the best over that period. PWC (up 36 percent) and freshwater fish (up 22 percent) have also grown since 2010.

Click image to view larger (Source: Boating Industry survey)

Click image to view larger (Source: Boating Industry survey)

The runabout/deck boat segment is down 7 percent even from 2010’s terrible numbers, driven mostly by the continued decline in sterndrive sales. Yacht sales are down 11 percent and cruiser sales are down 4 percent over that period.

(See additional state-by-state maps here. For more detailed reports, contact Peter Houseworth at peterh@info-link.com or (786) 888-8238.)

Boats over 40 feet, hit hard during the recession, have had some of the strongest sales growth this year, Dammrich said, especially in the offshore fishing market.

“The saltwater category has been growing in double digits, the low teens, for three years running,” Dammrich said. “One of the things contributing to the sportfishing segment is a lot of product innovation and taking the hardcore fishing boat and making it a family dayboat than can also be used for hardcore fishing.”

Affordability, economy top concerns

There are a number of potential challenges facing the industry, but affordability continues to be the top concern for Boating Industry readers.

Nearly half of all respondents said they are very concerned about the challenge affordability poses to the industry, with 96 percent saying they were at least somewhat concerned about the issue.

Some states are faring better than others in the recovery. This map, provided by Info-Link, shows the increase in powerboat sales in each state from 2010 to 2015. Click image to view larger (Source: Boating Industry survey)

Some states are faring better than others in the recovery. This map, provided by Info-Link, shows the increase in powerboat sales in each state from 2010 to 2015. Click image to view larger (Source: Info-Link)

Thirty-two percent said they were very concerned about ethanol and the growing use of E15. About a quarter of all respondents are very concerned about competition for time and money from other activities.

Demographic challenges were also a concern, although not as large as other categories. The aging buyer base was a concern for 87 percent, with 20 percent saying they were very concerned about it. The low participation rate of minorities was a concern to 62 percent of readers, and only 6 percent said they were very concerned about it.

The lack of entry-level boaters should be one of the top issues for the industry in 2016, Houseworth said. That is reflected in the continuing decline in sales in the runabout market.

“We still are not getting entry-level boaters and that’s who buys these boats,” he said. “That seems to be who’s missing from this equation.”

The categories that are performing well are not being driven by new boaters, Houseworth said, with the partial exception of pontoons, which is about 50 percent new buyers/50 percent current boaters.

Survey respondents see overall economic conditions as having the most potential to impact their business this year, with 63 percent saying it will be very important to their success in 2016. Forty percent cited the weather as very important, while only 23 percent see government regulations as very important to their success or failure this year.

 

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