(Zero Hedge) To elaborate more on our July report titled “Trade War Chaos: Trump’s Tariffs Crash American RV Industry,” it seems the RV industry continues to flash a recessionary warning light.
Related The Trade War Is Already Having A Huge Impact On The U.S. Economy
by Staff Writer, August 21st, 2019
The Wall Street Journal reports that Elkhart, Indiana, is the industrial hub of American RV manufacturing, has been used by analysts and economist as a leading indicator of consumer demand for luxury items.
Domestic shipments of RVs to dealers have plummeted 20% so far this year, compared to the same period last year, after dropping 4% in 2018, according to the Recreational Vehicle Industry Association.
Michael Hicks, a Ball State University economist who tracks the industry, warned that the fall in RV shipments could indicate a broader economic downturn is ahead. Hicks said shipments had fallen sharply just before the last three U.S. recessions.
Hicks said, “the RV industry is better at calling recessions than economists are.”
He said weakening consumer demand for RVs coupled with increasing vehicle prices due to tariffs suggests the economy is headed for a downturn.
Nearly two-thirds of recreational vehicles in the US are manufactured in the Elkhart region, as well as other durable goods. Elkhart ships its RVs to dealers across the country, who are sensitive to demand and are cautious not to order too much inventory. Any pullback by the consumer can instantly ripple through the supply chain back into Elkhart manufacturing plants.
“Elkhart is very distinctive because it is so highly dependent on the RV industry,” said Morton Marcus, a retired economist formerly at Indiana University’s Kelley School of Business. “As a result, it tends to be very cyclical with the kind of product consumers can very easily say, no that’s too big a ticket item for me to buy this year.”
The slowdown has already ticked up the unemployment rate in Elkhart County, which has a population of 200,000, was 3% in June, up from 2.1% last April. Weekly hours worked dropped a 1/2 percent in June.
In the last recession, Elkhart’s unemployment rate soared to 20% in 2009.
Thor Industries commands 50% of the North America RV market, recently reported its sales dropped 23% in its fiscal third quarter, which ended in April, compared to a year ago. Production cuts and layoffs have been in full swing at some of Thor’s North American plants.
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Thor assembler Demiris Jahmal Williams told Reuters his hours were slashed, and his factory has been shut down through July.
“This is the worse I’ve seen it,” he said.
Managers at RV manufacturers and suppliers said President Trump’s trade war sparked the slowdown in Elkhart.
“The tariff price increases are what tipped the RV business — it started the landslide, no question,” said Tom Bond, the materials and purchasing manager at Adnik Manufacturing, an Elkhart-based division of Norco Industries.
Baird analyst Craig Kennison estimates retail sales of RVs this year could be down mid-to-high single digits and expects a similar decline next year.
And according to Hick’s comments, the next recession may have already arrived with declining RV shipments expected to fall for 2019 and 2020.
Any rate cut in September is three quarters too late, the downturn has already begun.
Stillness in the Storm Editor: Why did we post this?
The economy is a general term describing various exchanges of money, goods, and services between individuals, groups, and nations. The Deep State employ elaborate methods to manipulate the economy for the purpose of controlling human life, specifically by making it difficult to access goods and services that improve quality of life. The preceding information reveals news or research related to the economy at some level. This information is important to understand because it is one facet of the global control system. Truly free people have the ability to exchange their creative works (goods and services), which allows them to gain increased abundance over time due to innovation, technological advancement, and frugality. Thus, but understanding the economy and how money works, which is something most people do not understand, social systems of freedom can be developed. An individual’s freedom is only as effective as the environment within which they express their rights. As such, the individual is encouraged to gain deep knowledge of the law, and the expression of rights, which in a grand sense, is the economy at all levels—the exchange of ideas, energy, and resources. Once a group of individuals learns how to unite to protect their rights and resources (e.g. a nation or country) they can defend themselves from Deep State manipulation if they can guard against divide and conquer tactics and forme a truly lawful body politic.
– Justin
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Source:
https://www.zerohedge.com/news/2019-08-20/worse-ive-seen-it-recession-imminent-rv-industry-crashes
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