  
Tony Dean ...
Outdoors, Inc.
1013 North Grand
Pierre, SD 57501
(605) 224-5104
FAX (605) 224-2977
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Outlook not as Gloomy as it Looks
By Jim Shepard
For the past year, we've seen signs in the sales of big-ticket items that despite our putting our best faces forward, things are not going well for out economy. We're not talking the overall gloom-and-doom of some news outlets, but we're certainly not going to try and tell you that slowdowns in sales aren't impacting business.
We've seen two rounds of slowdowns, layoffs and suspensions at Brunswick's marine engine company, Mercury. Brunswick has essentially ceased production on two lines of boats, and is slowing production due to a glut of inventory.
Other companies are talking about performing necessary maintenance on equipment when what they really mean is "there's not enough selling right now for us to keep making product". If you'd like to buy a truck, I can point you toward any number of manufacturers and new and used dealers who are willing to play "let's make a deal" simply to move product off their lots. In my area, I'm seeing used trucks that were selling in the $20,000 range now being listed at $15,500 and lower - by dealers. National resellers are finding they can't get enough economy cars and can't move the formerly hot sport utes and pickups.
Last week, Chrysler Corporation announced it was getting out of the leasing business. With Ford and General Motors hemorrhaging money in virtually every area, they simply haven't had time to realize that leasing with its formerly high resale values on SUVs and trucks is going to take another bite out of their business.
And it's not bash the Americans day - Toyota, Nissan and Honda aren't exactly lightening their truck inventories, either.
But there is one shining area where the industry continues to chug along -the shooting sports. Firearms makers are seeing shipping delays due to high demand, not a lack of manufacturing. If you're building military/tactical style gear, you're seeing sales that harken back to Y2K (anyone wanna buy a grain mill? I have several contacts who are still trying to sell off their survival gear - they're buying ammo with the proceeds). And ammo makers are reporting record sales and the expected profit levels.
Being old enough to remember (vividly) the long lines at gas stations, I'm not ready to yell "recession" any more than "fire" in a theatre. But I have also covered business stories long enough to know that things are in a shaky situation right now. It wouldn't take a lot more bad news to really see the economy slow to a crawl - or lose ground.
High fuel prices are all relative. When gas hit $1/gallon, I remember screams of protest - I made some of them. If you owned a 400+ horsepower muscle car and lived to "crank it" you were seeing the gas than that was once $5 to fill going to $20. Today, just to give you a bit of perspective, that same gas tank could cost anywhere from $80-95. I traded the muscle car for an MG and considered myself one of the fortunate few. At least there are hybrid choices out there these days that don't mean driving along in an econo-box that's underpowered, undersized and lack the power to pull dental floss out of….Let's just say cars are better today and let it go at that.
Yesterday, another sign that the economy isn't headed out of the dumps quickly for one big-ticket item - RVs. Thor Industries (NYSE:THO) released their quarterly and annual numbers for the 12 months ending July 31, 2008.
It wasn't a pretty quarter for the world's largest manufacturer of recreational vehicles. RV sales were down thirty percent for the last quarter. Last year, if you remember, sales weren't great, either. The bright side of Thor's business was bus sales - up five percent for the quarter versus 2007.
More of the same for the annual numbers- an eight-percent overall annual decline in RV sales with another interesting number - a sixty percent decline in inventory over the previous year. If a single number can indicate a manufacturing slowdown, this one would be it. A significant reduction in inventory despite a decline in sales equals lowered output.
I'm hearing the same stories from powerboat sources as well.
Yesterday, The Fishing Wire carried a feature on the double-digit growth of kayaks for fishing. It's not a strange coincidence that non-powered alternatives for fishing are coming back en vogue. It's an economic fact that many are looking for less inexpensive alternatives for family vacations. Despite deep price-cutting at many resort/vacation destinations people are eschewing long-distance travel. They're also taking shorter vacations. Surveys show the cutbacks are directly related to having less discretionary income.
Outdoor activities, like virtually every other set of activities that rely on shrinking discretionary spending, is seeing the impact in some areas. Fortunately, there are still activities in our area where participation can continue, even with dips in spending.
I've been watching - and visiting - yard sales and "second chance" sporting goods stores in my area to see what's selling. Golf and fitness had been leading categories, but I've seen growing interest from buyers - and sellers - in outdoor gear.
That says we have the opportunity to get more people involved - or re-engaged in the outdoors.
In the long view, that's good for everyone.
--Jim Shepherd
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