Boat Sales Pick Up Across the Spectrum in U.S.

From PWCs to large motoryachts dealers
and brokers across the country have reported to BoatTEST.com that sales not only
picked up in the second half of March, but a few dealers had what they characterized
as “terrific” business. One dealer in Connecticut said he had the best March in
years. Bayliner, Glastron, Four Winns, Formula and other builders all report that
sales had noticeably picked up in March from the winter doldrums. The lead article
on the front page of yesterday’s New York Times said that New York Times/CBS News
polls indicate that “Americans have grown more optimistic about the economy...”

Boat dealers across the country report that the last two weeks of March sales spiked up.

The New York Times article said that 20% of those polled
now think the economy is getting better compared with only 7% in January. The polls
also disclosed that about 20% of the country has not been materially affected by
the recession. 35% of those interviewed felt confident that the economy would improve
over the next few months.

Possibly even more telling is the fact that
19% of those sampled said that they have not cut back on buying luxury items. When
asked if they were concerned about losing their job within the next 12 months, 30%
answered “not at all.” The poll has a margin of error of “no more than three percentage
points.”

Word from the Top

Fed Chairman Ben Bernanke was quoted as saying
yesterday morning on NPR radio that he sees some "green shoots" in the economy.
White House economic adviser Larry Summers said that he sees mixed data, but in
contrast to six months ago, there are "sprouts of green."

David Wessel, Economics Editor of the Wall
Street Journal also said on NPR yesterday that consumer spending was up in March,
car sales were up, home sales were up, and that there were signs that factory orders
might also be turning up. He went on to point out that during the last four weeks
the stock market had gone up 20% and that we were in the 17th month of the recession,
the longest since WWII.

Boats Sales as a Leading Indicator

We have watched the boating industry for the
last 40 years and think that it is an early indicator of what the economy is going
to do. Because boat buying is such a discretionary matter, the slightest ripple
in consumer confidence is reflected in boat sales. Indeed, boat sales had been falling
since 2005 which turned out to be an early predictor of the collapse of the housing
bubble which occurred in 2007.

The last deep recession is officially recorded
as stretching from 1979 to the end on 1983, but boat sales came roaring back in
1983, 12 months before the rest of the economy.

Good Times for Buyers

Certainly opportunities for boat buying have
never favored the consumer more than now with many builders giving factory rebates
and dealers working on razor-thin margins just to free-up their floor plan loan
obligations. Used boat prices have also taken a tumble the last six months. As we
said in January, we think 2009 will go down as the best time to buy a boat in decades.

Thom Dammrich, president of the NMMA (National
Marine Manufacturers’ Association), was quoted yesterday in an industry trade publication
as saying that he thinks fully half of the employees in the boating industry have
lost their jobs in the last year. Other industry observers have suggested that methods
of sales and distribution might be considerably different in the future, due to
the reduction in the number of dealerships and the curtailment of easy floor planning
credit. Certainly there will be fewer dealers which reduce local price competition.

Currently boats are now being built only to
order, as a general rule, which means in all likelihood the deep discounts consumers
have encountered this year will dry up. Once the current overhang of product is
sold, which industry observers expect to happen by this summer for most brands,
the party may well be over.

Certainly one month of positive boat sales
does not make a recovery, but it is a hopeful sign.