Economist: RV industry sale declines could indicate possible recession
A Ball State economist says a major industry in Elkhart County is a better predictor of past U.S. recessions than people in his own profession.
"Those of us who are economists aren't very good at predicting the moment a recession starts," offered Michael Hicks.
Since 1982, when RV sales were first recorded, Hicks said all three recessions (1990-1991; 2001-2002; and 2007-2009) had two consecutive years of negative sales growth. In 2018, sales from manufacturers to dealers dipped 4 percent and have gone down 17 percent in the first six months of 2019.
"I think [the recent sales declines are] largely due to increased costs, due to the tariffs imposed on Chinese imports, which comprise a very big portion of RV manufactured inputs," Hicks explained.
On Monday, U.S. Rep. Jackie Walorski, who represents Indiana's 2nd Congressional District, expressed the U.S. economy is doing fine and that the RV industry is very resilient.
"Do I think this is having anything to do with folks talking about recession? Absolutely not," said Walorski. "This economy is raging. When you look at things like RV sales, boat sales, things that are made in our district that people are purchasing, they're still purchasing."
She added the recent repeal of the Section 232 tariffs on steel and aluminum will ease the pain that was experienced in Elkhart County. But Walorski wants to see more tariff repeals take place.
"I still spend 24/7 of my waking hour, making sure that we get these tariffs off as fast as we can,” Walorski said. “So, some of those have been rolled off. There’s more to come.”
Hicks at Ball State said the barometer of economic growth (the GDP) for the past two years has indicated slow growth, with a 2.9 percent increase in 2018 and roughly 2.5 percent so far in 2019.
He added it's too early to tell if the U.S. is in a recession and that those figures are unlikely to be available until the middle of 2020.