Marine manufacturers share experiences—good and bad—amidst the changing economic climate.
The U.S. recreational boat industry took a Titanic-sized hit in 2005, which continues to roil through the nation. In the aftermath of an epic wave of red ink arising from the nation’s floundering housing sector, an anemic recovery has left retail boat sales in the doldrums. Polyester resin shipments to the marine sector have “plunged to horrendous levels,” says Ray MacNeil, owner of Composites Consulting, in Wexford, Pa. Shipments from U.S.-based American Composite Manufacturers Association (ACMA) members dropped from 322 million pounds in 2005, to 86 million pounds in 2009, says MacNeil. Figures for 2010 rose slightly to 120 million pounds.
Taking Stock and Moving Forward
Following an onslaught of bankruptcies, consolidations, and downsizing, a tepid recovery portends more pain for the industry.
Boating and housing are inextricably linked, says Phil Keeter, president of the Marine Retailers Association of America (MRAA), in Boca Grande, Fla. “Dealers are holding on tight. I am concerned that 2011 will be no better than 2010, and it could be even worse. Plumbers, electricians, and contractors: those people are highly paid, housing employees who spend their discretionary money on boats. That same holds true for the auto industry. They are our prime buyers,” says Keeter. “I don’t think boating is going to grow in the near future.”
Keeter says the size of the industry is in jeopardy, and thinks it unlikely that U.S. boat manufacturing will return to annual production levels equivalent to the 400,000 boats produced before the economic recession. “I’m not normally a pessimistic person, but it’s been a tough year for dealers. Then, business was good, moving right along. I don’t hear much good news from our members now. It’s not a pretty picture. When business is bad, daily calls from the members get to be kind of a pattern.”
Brock Elliott, general manager and founder of Campion Boats, Inc., in Kelowna, B.C., says his U.S. market sales have nearly dried up. “We’re doing 10 percent of what we used to do in the U.S.” He says his 2011 sales through the end of May hit a record low. “It’s been consolidation after consolidation after consolidation.”
Elliott adds that his firm stayed afloat due to his extremely conservative management of the family-owned business. “We sell boats in 30 countries worldwide, and just issued a press announcement on our first shipment to China,” says Elliott. The company is shipping boats to buyers in New Zealand, Switzerland, and Canada. In contrast, the eco-focused boat manufacturer shipped just one boat to New Jersey in a recent shipment. “We don’t make any money on it, not with one at a time,” he says.