Feb 28, 2023

Last week the stock markets sank again in the US and Canada on expectations that the Fed would continue raising interest rates. The reason for those expectations was a reading that the rate of inflation rose in January and we continue getting data suggesting that the labour market is very tight.

When companies need people but can’t find the labour they need at the wages they are offering, the logical solution is to offer higher wages. But then your costs rise so you need to increase your selling prices. Rising wages and prices are inflationary and so on. 

Just because I don’t know how to read or navigate the markets these days does not mean that no one does. In fact, I suspect that some people (maybe a lot of people) do know how to profit from these economic conditions and they are making money like never before.

The boat business has long seemed to me to be the economic barometer for several reasons. Boat buyers need to be well off (especially with our new Luxury Tax) to buy a new boat and it looked to me like boats were selling well at the Toronto International Boat Show in January. If Toronto looked strong, Miami looked like it was going gangbusters. There is no way I can actually measure the number of boats and the extent of dock space at Miami but it seemed like there were more boats on display that in past years and I was seeing brands that I had never seen before.

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The boats seemed larger too. I asked several top boat company executives if this was just my imagination and they all said no – that their customers are looking for more space on board. One commented that catamaran’s are booming because they offer so much floor space.

At the Sea Isle Marina where in-water demos were available, I walked the dock and took pictures of boats from a dozen brands that I did not recognize.

In no specific order as I walked the dock, I took pictures of Aloha pontoons, Front Runner CC’s (one with an Oxe Diesel outboard) Ankra, Phenom, Mocean, XO EXPLR, Bronson, Costa, Blackwater (really?!!) Solace, Hanover, Rafnar and Sedna. And, that was on one dock.

Maybe these were brands from Europe or South America that are just now coming to North America, or maybe they are new brands capitalizing on the wave of boaters that rose out of the Covid pandemic but either way, I didn’t see these brands last year. I did see several new brands in Toronto, although not as many as in Miami.

At the normal family end of the market, BNN Bloomberg reported on Feb 21, that shares of Walmart were under pressure; down four per cent in the premarket. The retailer’s profit forecast for the year ahead fell short of expectations, with the company pointing to stretched household finances as a strain on consumer spending. Then Home Depot was also down about four per cent as wage costs rise. Home Depot said they would be spending an additional US$1 billion to increase hourly wages as it faces a tight labour market.

Again, the phrase “the rich get richer” rings in my ears.

But with this apparent strength in the US boat market, Canada seems to be facing sales headwinds as a result of the government’s new Luxury Tax on boats and now we are facing potential new legislation for mandatory PFD wear. Did you respond on this?

IMPORTANT – the public consultation period has been extended to March 5 so be sure to weigh in on this important matter with Transport Canada. You can read the full story on our website here. This ran in the Feb. 14 edition of News Week Digest but here is the key paragraph for your input.

“Please provide your feedback to MSSRegulations-ReglementsSSM@tc.gc.ca on the above questions by February 20, 2023 (NOW EXTENDED TO MARCH 5). Should you have any questions or require more information regarding this ongoing project to explore mandatory wear, please reach out to Heidi Craswell (heidi.craswell@tc.gc.ca ).”

Stay engaged and support your marine trade association. Crazy times ahead!

Andy Adams – Editor