Will Positive Economic Conditions Translate into Boat Sales?
INSIGHT
Will Positive Economic Conditions Translate Into Boat Sales?
By Andy Adams
Generally, we seem to be seeing an improving economic picture on an almost global basis, and a solid looking 2014 ahead for Canada from many perspectives…but will these positive economic conditions translate into boat sales?
As I write this, I’m at the 2014 Miami International Boat Show and the opening industry session was held by GE Capital where several of their senior people took to the podium, ending with Rob Podorofsky who delivered a similar, but even more positive economic outlook than GE’s John Peak gave during the industry breakfast at the Toronto show in early January.
The team at GE Capital is saying the industry in the U.S. should achieve 8% growth in 2014 and they are thinking it could be even better. But, they also warn us of volatility ahead that could change the picture suddenly.
The Toronto show opened just after the worst ice storm in 30 years, resulting in power outages for up to 250,000 people in Toronto and record snowfalls. Still, when the doors opened, the crowds on the first Saturday were impressively heavy, a good sign indeed. Then Sunday was noticeably lighter and weekdays were simply quiet.
The second Saturday was rockin’ again and the last Sunday was not bad but when the dust cleared, the truth was that the weather was never a problem, everyone had gotten their power back and show organizers reported that 72,289 came through the turnstiles. This attendance was an 11% decrease over 2013, although that year was the highest in the previous five years.
Boat dealers told us that they were selling boats in Toronto, but who were the buyers? If they were show-goers and walk-ins, we’re very pleased. If these people were mainly existing customers, then it’s a less positive picture.
Only days later, at the Vancouver International Boat Show, the crowds seemed to be really strong at the in-water displays at Granville Island Maritime Market and Marina, but I was told there was perhaps a bit less traffic at BC Place.
The post-show press releases indicated that onsite sales and leads generated at the two venues forecast a positive 2014 for Western Canada's boating industry. Upwards of 31,338 people attended the 52nd Vancouver Boat Show but again that was down slightly from 2013's attendance of 32,644.
We need to continually be attracting new people into boating to make up for baby boomers and older people who are retiring and moving out of boating.
We recently read the latest Scotiabank Global Auto Report.
The report said, Canadian passenger vehicle sales climbed 4% last year to a record 1.74 million units. Western Canada led the way, but every region posted higher sales in 2013, with six provinces reporting record volumes, according to the latest Scotiabank Global Auto Report.
"We expect purchases to climb to a record 1.76 million units in 2014, bolstered by a strengthening global economy and continued low interest rates," said Carlos Gomes, Scotiabank's Senior Economist and Auto Industry Specialist. "New vehicle affordability in Canada is at the best level in two decades, partly linked to manufacturer incentives, and consumer confidence is expected to strengthen as the pace of job creation picks up."
The Harper Government just announced their new budget and the good news seems to be that there is potentially already a balanced budget and that the Harper Tories are setting up for the next election to announce a surplus in 2014 as they head to the polls hoping to hold onto to power for another four years.
So there’s another source of positive economic news…but again, will this translate into more boat sales?
Let’s hope that continued low interest rates, strong housing and the momentum of a record year for the auto industry should give us a good shot at a strong 2014!
