According to the Recreation Vehicle Industry Association or RIVA, the recreation vehicle (RV) industry’s shipments are forecast to reach 375,100 units in 2016, which represents an increase of 1.6% above the projected 2015 total of 369,100.
Frank Hugelmeyer, who is RIVA’s new President, recently said that this is an exciting time for the RV industry. Hugelmeyer said that shipments for RVs are now surpassing pre-recession levels, and the
industry has a bright future filled with opportunities for sustainable growth.
According to RIVA, its forecast for 2016 shipments is more than double the levels seen during the 2009 recession. The RV industry was significantly impacted by the financial crisis and the subsequent
recession.
According to RV Industry analyst, Dr. Richard Curtin, the favorable outlook for the industry is based on continued gains in jobs and wages, as well as low inflation. This morning a report showed that
consumer prices remain low in the U.S. At the same time, the jobs report for the month of October and November shows continued improvement in the labour market.
One concern for the RV industry is the rise in interest rates. The U.S. Federal Reserve kicks off its two-day monetary policy meeting later today and is expected to announce a rate hike when it releases its monetary policy statement on Wednesday.
But Dr. Curtin believes that slowly rising interest rates are not expected to have much impact on RV sales. He added that record growth in sales of light trucks and low fuel prices will help boost towable sales.
The robust outlook for the industry augurs well for CanaDream Corporation (TSX-Venture:CDN), a Vancouver-based seller of RV fleet on a wholesale and retail basis.
Tuesday morning, CDN reported record financial results for the second consecutive quarter.
CDN’s revenue for the six-month period ended October 31, 2015 was $29.8 million, representing an increase of 22% over the same period in the previous year. The company’s net income for the six-month period was $7.8 million, representing an increase of 40% over the same period in the previous year.
Earnings per share for the period were 40.6 cents per share, up 38% on a year-over-year basis.
The company’s guest revenue during the six-month period rose 17%. The increase was due to an increase in the number of vehicles rented and higher average nightly revenue.
Shares of CDN have been on a two year uptrend, however were down almost 11% on the favorable news Tuesday.
