Selling boats amid double-dip concerns
I spoke Tuesday with yacht dealer Ben Wilde as he drove a Nordic Tug 54 into a stiff current on the C&D Canal en route to PassageMaker magazine’s Trawler Fest event in Baltimore. He grumbled about the foul tide that would put him into port after dark, but he didn’t complain a lot about the economic headwinds that he, like the rest of us, is also bucking.
Wilde and company sold three boats in the last two weeks and picked up six strong leads at two recent boat shows and a three-day open house held last weekend at Wilde Yacht Sales in Essex, Conn. Even though the headlines warned that a double-dip recession and a Greek debt default might be on the near horizon, Ben was tapping wood and maintaining course.
Based on conversations with potential customers at the Newport, R.I., and Norwalk, Conn., boat shows and at his open house, Wilde says boaters seem resigned to the fact that economic waters will remain roiled for the foreseeable future, but they also were tired of putting their lives on hold.
“They’re tired, and they want to enjoy life,” said Wilde, who sells Nordic Tugs and Ranger Tugs. “[They know] things might not get back to what was normal for some time.”
Wilde Yacht Sales sold a new Ranger 29 to a customer who cruised to the Newport Boat Show from Essex aboard the tug. The following week, the dealer sold a new Ranger 27 to a woman who traveled back to Essex from the Norwalk Boat Show on the boat of her liking. The dealership took her Ranger 21 on a trade and sold it the next day.
“We were very surprised,” Wilde said, speaking from the bridge of the big Nordic Tug. “Three boats in two weeks and six great leads.” All three transactions were cash sales, he noted. Newport and Norwalk were good shows, and the open house, which drew about 150 people, he said, was the “best we’ve had in three years.”
Wilde reiterated what he has been seeing for more than two years: Boaters across the board are downsizing, and, for his customers, fuel efficiency has become more and more of an issue. And, he added, they have gotten used to living with a certain level of uncertainty.
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Good thing there are some hardy consumers on the docks, given that the volume of talk regarding a double-dip recession has been increasing of late.
Last Friday, economist Lakshman Achuthan of the Economic Cycle Research Institute declared publicly for the first time that a new recession was inevitable. A “done deal” is how he put it to the hosts of CNBC’s “Squawk Box” morning business show. “We are going into recession.”
Co-founder of ECRI, a New York-based independent forecasting group that predicted the recession three years ago, Achuthan said his outlook was based on a broad range of leading indicators for the U.S. economy.
“There is contagion among those forward-looking indicators that we only see at the onset of a business cycle recession,” he told CNBC. “We are not going to escape this, and it’s a new recession.”
He was asked to gauge how bad this downturn will be. “Unknowable today,” he answered. “Back in the last recession, in August of ’08, prior to the Lehman debacle, these indicators were pointing to the worst global recession in 30 years. Then you had Lehman. So if I look at today’s setup, I’m wondering, Is there a shock out there, a Lehman out there? That’s a question.”
He continued: “Today, what these indicators are saying is, even if some shock is averted … you’re still having a recession. If there is a shock, it could be a lot worse.”
The co-hosts groaned. I groaned.
“It’s better to know this stuff,” he said.
Whether he’s right or wrong, we’re likely to be waiting a little longer for a fair tide.