Last week, the RV Industry Association gathered a few outdoor industry economists in the manufacturing mecca of Elkhart, Indiana, for a panel discussion on supply chain issues.
These sorts of get-togethers are nothing new in America. During the pandemic, most industries held monthly hand-wringing sessions on Zoom and other internet platforms to go over the latest data and try their best to predict what would happen next.
Last week’s gathering in Elkhart was different only in that it was one of the first I’ve seen that offered a glimmer of hope to RVers who (pick one):
- Have been waiting for several months for their new factory-ordered RV to arrive.
- Have taken delivery of a new RV that had more parts missing than a discount Thanksgiving turkey.
- Have waited impatiently to flush the toilet on their current RV because nobody has the required foot pedal to replace the one the kids broke.
- Want manufacturers to take parts from the assembly line to fix recently delivered RVs with faulty bits and pieces.
- They are ready to throw in the towel on their RVing lifestyle because they can’t keep their rig up and running with just spit and duct tape.
The list of woes goes on. But let’s get back to that glimmer of hope.
An RV economist’s perspective
Eric Post, the senior economist for an outfit called ITR Economics, walked panel watchers through a plethora of charts and graphs to explain the varied performance of RV supply chains in recent years.
Post said what we’ve witnessed in the RV industry is a classic example of demand far outstripping supply. No surprise there.
But Post went on to declare that there are signs that things are beginning to normalize and a “realignment between demand and supply” could occur as early as this year. More parts are available than RVers waiting to buy them. That’s encouraging.
“It’s Important because when we see supply chain normalization occur, it means that inflation is going to ease,” he told the group.
A flicker of light on the horizon
Economist Post said today’s market is a lot like it was around 2007 (right before the recession). Anyone who wants a job has one, and employers are raising wages regularly. Consumers are offsetting some inflation pressures by dipping into their savings accounts since consumer debt decreased from 33 percent to about 9 percent during the pandemic.
“It’s a totally different consumer that’s we’re facing right now,” Post said. It doesn’t mean that inflation isn’t going to nick away or that interest isn’t going to nick away, but that people have the money to go out and spend and when they see something they want — like an RV — they ‘re going to go out and spend on it. ”
Last fall, the RV Industry Association forecasted manufacturers would ship well over 600,000 rigs in 2022. They’ve since tempered those numbers. The last I hear it was down to about 590,000 — still an impressive output when you consider they are constantly on the hunt for everything from air conditioners to door latches.
Why RVers should care
If Post and the other RV economic pundits are to be believed, the “normalizing” of the supply chain will bring an end to dealer inventory woes, which are already showing signs of going away. It might also mean your new RV will:
- Arrive with all parts included.
- Be built with a bit more quality as production lines are allowed to slow down a bit.
- Temper rapidly increasing RV costs as more inventory arrives at dealerships.
- Eventually put buyers back in the driver’s seat when it comes to the buyer / dealer dynamic.
- In the big picture, overall manufacturing supply chain normalization could also slow inflation overall.
What do you think?