A leading economic indicator seems solid: boat sales

The 50-foot luxury yacht dominated the showroom floor, its glossy black hull masking three well-appointed bedrooms, mahogany cabinets and six televisions inside.

The Galeon 500 Fly, weighing 55,000 pounds and listed at $1.6 million, is the largest and most expensive boat at the 2019 Houston Boat Show held this week at the NRG Center. Johnny Timmons, a dealer who sold five yachts for a total of $4 million at last year’s show, is confident he can find a local buyer for the Polish powerboat.

“I have no doubt it’s going to sell at this show,” said Timmons, salesman at luxury boat dealership MarineMax, which has a private marina in Clear Lake.

Local dealers are anticipating another year of strong boat sales, boosted by a robust national economy and healthy consumer confidence. However, after seven consecutive years of sales growth, industry leaders fear the tide will soon turn amid recent fears of a looming recession, cost-raising aluminum tariffs and rising rates. rising interest. The marine industry expects boat sales to grow 3-4% this year, down slightly from the 4-5% sales growth seen last year.

“Everyone is expecting some softness at the end of this year and into 2020,” said Thomas Dammrich, president of the National Marine Manufacturers Association. “But we don’t expect a rapid decline in boat sales.”

Sale of new motorboats, motors, trailers and accessories in Texas

2017: $1.7 billion

2016: $1.5 billion

2015: $1.4 billion

2014: $1.2 billion

2013: $1.1 billion

2012: $1.1 billion

2011: $916.2 million

2010: $749.1 million

2009: $854.3 million

2008: $994.2 million

SOURCE: National Marine Products Manufacturers Association

Boats, a discretionary purchase made by those with disposable income, are a leading indicator of where the economy is headed. Boat sales, for example, were falling before the last recession, which became the worst in 70 years. Boat sales fell 60% and manufacturing output reduced by 80%.

Since the Great Recession, sales of motorboats and other marine equipment in Texas have rebounded, rising 68% over the past decade to nearly $1.7 billion in 2017, according to the National Marine Manufacturers. Association. The Chicago-based trade group represents 200 boat builders, 50 engine builders and 700 marine accessory companies across the country.

“As long as boat sales continue to grow, there’s still reason to be optimistic,” Dammrich said. “Recession is not imminent.”

Still, boat dealers nationwide will be watching sales closely at the Houston Boat Show, the first major boat show of the year and a reliable indicator of how sales are doing this year. Houston is one of the largest boat markets in Texas, which ranks among the top five boating states nationally.

The 2019 Houston Boat Show features nearly 1,200 boats, including cruisers, center console fishing boats and pontoon boats. Dealers at the show lost a day of sales due to the Houston Texans’ Jan. 5 playoff game, but attendance is on track to hit last year’s records, said Kenneth Lovell, president of the Houston Boat Show and the local trade group, which oversees 50 dealers.

An estimated 80,000 people, many of them potential buyers, are expected to attend the 700,000 square foot show, where some dealers can make up to half of their annual sales in just over a week.

“There are always a lot of eyes on Houston,” Lovell said. “The industry is always looking to see how we’re doing.”

Boat Show dealers said they had seen no decline in interest or sales despite the recent slump and wild swings in stock markets. Seabrook-based Coastline Marine owner Cole Starr said 2018 was his best year since starting his business in 2008. The dealership sold 70 custom fishing boats last year, each ranging in price from $60,000 to $110,000.

Starr is currently building a second dealership location in Kemah and has nearly doubled its booth space at the boat show to showcase 13 boats. Starr said he hopes to sell at least 10 to 15 boats at the show. From the first hours of the boat show, he already had deposits on two.

“I don’t see any slowdown,” Starr said. “Everyone told me their sales were off.”

Another sign of the industry’s health is that dealers are hiring. SMG Boats, which sells around 350 boats locally each year ranging in price from $18,000 to $350,000, has doubled its sales staff to eight. In the early days of the boat show, the Conroe-area dealer sold a $200,000 Bennington pontoon boat, complete with refrigerator, speakers and party lights.

Texas Marine, which sells more than 1,000 boats a year in the Houston area that range in price from $15,000 to $350,000, has hired 15 additional full-time and part-time workers for its staff of 100. Jonathan Whitmire, general manager of Texas Marine’s Conroe dealership, said he hopes to sell 250 boats at the boat show, a 30% increase from last year.

“We’re expecting a good show and a good year,” Whitmire said.

Most buyers shopping around the Boat Show said they weren’t fazed by the swings in the stock market in recent weeks. They said they view a boat as a long-term investment in creating family memories, ones that will last longer than a Disney vacation.

David Delgado, 37, said he hoped to spend around $50,000 on a new ski boat, used by water skiers. The West Columbia resident grew up wakeboarding on the San Bernard River and wanted to introduce the water sport to his two children, 8 and 4. As a mechanic in the oil and gas industry, he said he wasn’t worried about the stock’s recent volatility. Marlet.

“Even when the market fluctuates,” Delgado said, “I’m doing pretty well.”

Rex Colorado, 55, recently lost his high-paying job as general manager of a Houston-area mobile camera distributor, but still came to the boat show with his 14-year-old son, Lucas, to check out the latest fishing boats. An avid fisherman, Colorado, from Royal Oaks, said he sees boating as a passion and a way of life, which few are willing to give up even when times get tough.

“The boat is one of the last things to go,” he said, “with dinner on the table and gas in the boat.”

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