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State of the Industry NMMA - 2018 LJA Annual Conference

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2018 LJA Annual Conference

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State of the Industry NMMA - 2018 LJA Annual Conference

  1. 1. State of the Recreational Boating Industry SARA ANGHEL, PRESIDENT, CANADA
  2. 2. National Trends
  3. 3. A Truly American Industry source: NMMA
  4. 4. Outdoor Recreation is BIG Business  An overlooked economic giant, outdoor recreation makes up ~2% of GDP, contributing $374 Billion each year  Outdoor recreation exceeds such industries as mining and agriculture, which combined, have a lower contribution than outdoor recreation source: BEA
  5. 5. American Retail Spending on Boating $31 $35 $35 $33 $31 $28 $27 $29 $31 $31 $33 $35 $37 $39 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 USD(BILLIONS) source: NMMA
  6. 6. source: NMMA, Info-Link Retail Expenditure Estimates — $5 $10 $15 $20 $25 $30 $35 $40 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 PRE-OWNED BOAT/ENGINE AFTERMARKET ACCESSORIES
  7. 7. Traditional Powerboat Retail Sales — 100 200 300 400 500 600 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 UNITSThousands 1980s Recession 911 Asian Financial Crisis Desert Storm Iraq War Great Recession source: Info-Link
  8. 8. Powerboat, PWC, and Sailboat Sales, New Versus Pre-owned source: Info-Link, Bonnier 910 969 955 941 958 982 988 174 190 200 219 239 256 267 2011 2012 2013 2014 2015 2016 2017 UnitsThousands Preowned New
  9. 9. New Boat Retail Unit Sales 0 50 100 150 200 250 300 350 400 450 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Thousands Sailboat Powerboat source: Info-Link, Bonnier
  10. 10. New Powerboat Retail Unit Sales -7% -24% -27% -10% -2% 9% 5% 10% 10% 7% 5% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YOYChange source: Info-Link
  11. 11. 2017 Retail Unit Sales 2% 5% 8% 4% -1% 7% 9% 1% YOYChange High Unit Volume source: Info-link Low Unit Volume
  12. 12. Growth in Outboard Sales
  13. 13. Trends to Watch in 2018 1. Versatile family fun boats 2. Fishing Boats – 3-4% increase for saltwater, 1-2% for freshwater 3. Cruisers – Boats between 21-32 feet estimate gains of 9-10% in 2017 4. More boating experiences for new boaters
  14. 14. What Boating Requires to Grow Healthy Economy Job Creation Consumer Spending Housing Growth Consumer Confidence
  15. 15. U.S. Market Outlook U.S. GDP expected to grow 2-3% through 2020 5% growth in new powerboat sales in 2018 Gas prices remain at historical lows
  16. 16. Unemployment Rate: 3.8% - May 2018 U.S. Job Creation source: BLS
  17. 17. Consumer Confidence Index May-18, 124.5 0 20 40 60 80 100 120 140 160 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 R12MAVERAGE 26 mo. 24 mo. 51 mo. 35 mo. 35 mo. 24 mo. 20 mo. 40 mo. 82 mo. 96 mo. 47 mo. 104 mo. Average duration from peak to valley: 33 mo. Average duration from valley to peak: 57 mo. source: The Conference Board
  18. 18. June 4, 2018, $2.85 $0 $1 $2 $3 $4 1/7/2013 1/7/2014 1/7/2015 1/7/2016 1/7/2017 1/7/2018 Regular,ConventionalWeeklyU.S. City Retail Gas Prices source: EIA
  19. 19. RV v. Boat Shipments source: NMMA, RVIA
  20. 20. source: ITR Economics Wholesale Forecasts 0 40 80 120 160 200 240 280 0 40 80 120 160 200 240 280 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 12MMA3MMA 12MMA 12MMA Forecast 3MMA QUARTERLY PRODUCTION (3MMA) ANNUAL PRODUCTION (12MMA) OUTLOOK MANAGEMENT NOTE 134.5 147.6 Production will rise through 2018 and subsequently decline through 2019, edging below the current levels. Rise will return in 2020. Conserve extra cash this year in anticipation of Production decline next year.
  21. 21. 4/1/2018, 1.90% -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 YOYChange Real Disposable Income source: BEA
  22. 22. source: BEA Consumer Spending -6% -4% -2% 0% 2% 4% 6% 8% 2001-Q2 2001-Q4 2002-Q2 2002-Q4 2003-Q2 2003-Q4 2004-Q2 2004-Q4 2005-Q2 2005-Q4 2006-Q2 2006-Q4 2007-Q2 2007-Q4 2008-Q2 2008-Q4 2009-Q2 2009-Q4 2010-Q2 2010-Q4 2011-Q2 2011-Q4 2012-Q2 2012-Q4 2013-Q2 2013-Q4 2014-Q2 2014-Q4 2015-Q2 2015-Q4 2016-Q2 2016-Q4 2017-Q2 2017-Q4 ANNUALIZEDRATE Q1-2018, 1.1%
  23. 23. source: ISM, USITC, IHS Markit Manufacturing PMI 59.3 55.5 51.6 58.3 53.5 53.8 54.4 58.1 53.9 60.7 51.1 53.8 52.3 55.1 48.4 49.1 48.9 52.3 49.1 54.5 54.7 ContractionExpansion Top U.S. Boat Export Destinations (In Order) 50
  24. 24. Participation and Ownership
  25. 25. 2016 Boating Participation source: QSA Research
  26. 26. 17 Million First-Time Boaters in 2016 First-time boaters are more likely than other active boaters to be: • Male (75% vs. 54%) • Hispanic (32% vs. 10%) • Lower income (Median incomes are $60,775 for first-time boaters and $102,925 for other active boaters) • Renters (58% vs. 25%) • Less likely to have a college degree or more (19% vs. 35%)
  27. 27. Paddlesports Participation  21.7 Million participants nationally  7 outings/year on average  Continued YOY increasing participation rates source: ACA
  28. 28. = 75,000 15.8 MILLION BOATS IN USE source: NMMA
  29. 29. Registered Boats source: USCG
  30. 30. U.S. Boat Registrations 0 2 4 6 8 10 12 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Millions Source: USCG
  31. 31. 2016 U.S. Boat Registrations Outboard boats, 62.1% Sterndrive boats, 11.6% Inboard boats, 8.7% PWC, 9.5% Sailboats, 0.9% Other, 7.2% Source: USCG
  32. 32. About Those Registered Boats… Source: USCG, Foresight
  33. 33. source: USCG 40' and larger 1% 2016 Powerboat Registrations 1% of boats are 40’ and larger
  34. 34. Industry Headwinds
  35. 35. Aging Boater Population 0% 2% 4% 6% 8% 10% 12% 14% 16% 18 to 19 25 to 29 35 to 39 45 to 49 55 to 59 65 to 69 75 to 79 85+ Age Range 2015 Boat Owner / FTB Age Distribution Current Owners First-time Buyers Avg. = 45yrs Avg. = 55yrs source: Info-Link
  36. 36. And Do What We Can to Keep Them T O D A Y FIRST-TIME Boat Buyers in 2005 (564,000) 54% 32% 14% Still own same boat source: Info-Link
  37. 37. Because It Pays Off * REPEAT Boat Buyers in 2005 (838,000) 38 % 35 % 27 % T O D A Y Still own same boat * And gets better with each subsequent boat purchase
  38. 38. Rising Student Debt Source: NY Fed Consumer Credit Panel/Equifax
  39. 39. Reaching Future Boaters “Weekends on the water really bring us together. We’re creating all these great memories.” - The Vasquez Family

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