Tuning into the incredibly negative political campaigns these days reminds me of the game rock-paper-scissors i.e. economy up, economy down — who really knows?
It makes me feel like flashing a random hand signal of my own at some politicians. Ah, but I digress.
If we look past the nightly political slams, we can find positive indications that the economy is improving, if slowly, with a solid start to the second half of this year. The timing is good and should help us be upbeat heading into the industry’s round of fall shows that officially began last weekend with the Michigan City (Ind.) In-Water Boat Show near Chicago.
Topping the list of positive news is the increase in retail spending for July, up 0.8 percent, which is the biggest increase since last February, according to the Commerce Department. The rise included every major category ranging from sporting goods and autos to furniture and home building supplies — sectors we in the marine industry need to see rise. It’s important to recognize that while the Commerce Department doesn’t specifically track boat sales, we know boating historically gets a share of consumer expenditures so the overall increase likely includes boats and equipment sales.
Consumer confidence is reportedly heading upward this month for the first time in five months, according to the University of Michigan-Thompson Reuters consumer sentiment index. It has increased to a reading of 73.6, up from 72.3 in July. The sentiment gauge covers how consumers view their personal finances as well as business and buying conditions. For overall reference, it averaged about 87 in the year before the Great Recession. Interestingly, economists polled by MarketWatch had expected this index to decline in August, due in part to “economic uncertainty.”
Good news also comes from the housing industry. There is clearly more news coverage of a housing recovery than at any time in the last five years, according to Bloomberg News. The Tampa Bay Times front-page headline last week trumpeted there is “a shortage of houses for sale.” The confidence of the builders of new single-family homes climbed in August to the highest level in more than five years on expectations the recovery in housing will continue.
It also coincides with reports from The Home Depot, for example, that its customers spent more on remodeling and repair projects in the April-June quarter. Moreover, home prices appear to have bottomed out and are moving up. Thus it appears this spending reflects consumers becoming more confident about the recovery in housing and that, as we know, is good news for our boat sales outlook.
More positives that play well for boating include the 163,000 jobs added in July, which falls short of a “robust” recovery but is still the best month for job increases since February. Add to that the value of U.S. exports reached a record high in July (the marine industry is a positive exporter) indicating manufacturing is picking up, too.
Meanwhile, the portion of after-tax income that consumers put into savings rose to 4.4 percent in June, the highest in a year. Good news for available down payments and future purchases. Moreover, inflation remains in check with wholesale prices rising only 0.5 percent for the 12 months ending in July, the lowest since October 2009. In addition, the stock market indexes continue to hover around their highs for the year. That’s always a boost to boating’s primary target demographic.
So when someone tells you things are all bad, might I suggest you show them a random hand signal of your own and move ahead knowing there are many indices that signal we can sell boats to willing and able buyers now.