Plummeting RV Sales Forecast 2020 Recession
As posted to the Dent Research affiliated website Economy and Markets on 8/26/19
— Harry Dent | August 26, 2019
RV sales are crashing at a year-over-year rate of 20% below sales for the same period last year. 2017 was the peak thus far and 2018 sales were 4% lower. Hence, this year’s crash is making this look like a clear top. This article seeks to demonstrate that plummeting RV sales forecast a 2020 recession.
RVs are one of our mid-life-to-retirement sectors for Boomers. Sales used to peak at age 63, but the most recent updates to the Consumer Expenditure Survey shows them peaking a bit earlier, at age 59-60. That still makes it a strong growth industry into 2020-2021 for aging Boomers.
Hence, there’s no demographic reason for this industry to be waning yet. That makes this a potent recession indicator as it was for the last recession.
This first chart shows the trends since 1990 before its Spending Wave started rising in 1997.
The last peak came in late 2006 – several months after home prices peaked – and by two years later, in early 2008, we started the worst recession since 1981-82 and 1930-33. After the peak in late 2017/early 2018, we should be seeing a recession… and soon!
The next chart hones in a bit finer through the percentage change. Growth crossed the zero line to negative in early 2006 before – about a two-year lead on the recession of early 2008. Now, it crossed again in early 2018 and is accelerating rapidly in 2019. That would portend a recession by early 2020.
Also, recall my Dow Home Construction Index that first peaked in late 2005 when home sales peaked, a little over two years before the last recession. It peaked in mid-2017 this time around and portends a recession by early 2020 or mid-2020 at the latest.
The bond markets continue to see falling yields. They are seeing this recession clearer than stocks – as almost always tends to be the case. Bonds are more risk averse and look more for bad news, stocks are more risk prone and focus more on good news.
Plummeting RV sales forecast 2020 recession. No wonder the Donald is beating on Fed Chairman Powell to turn up the stimulus full blast again… and he says at the same time that the economy is doing well and as strong as ever.
(This is Blog Post #617)
Harry S. Dent, Jr. is a co-founder of Dent Research, an economic forecasting and investment research firm and publisher that works diligently to provide clients with the proprietary economic knowledge needed to accurately forecast what lies ahead in our economy so that they can take the necessary and appropriate action to ensure prosperity in their business, investment and financial affairs.