Slowing economic growth on a global scale has drawn economists to an array of data points that might hint at a recession.
Some of the standard warning signs include rates of inflation and employment to manufacturing and home-buying indexes.
In Indiana, though, one lesser-known metric has moved to the top of the pack — RVs. Eighty percent of the nation’s recreational vehicles are produced in Indiana, two-thirds of them within Elkhart County.
The industry is so consolidated in this section of the Midwest that dips in productivity can have an exaggerated impact on the regional economy.
The latest news is looking dreary. According to the RV Industry Association, national RV shipments year over year were down in July by 23.2%. That’s 8,500 fewer RVs that were shipped last July, and it could mean a lot of local manufacturing jobs. Motor homes were down by a similar margin.
But is this enough to derail an economy that has been growing at a steady clip with some of the employments trends in recent memory? Not by itself, no. However, RVs are not completely inconsequential in the grand scheme of things.
An economist from Indiana-based Ball State University notes that big-ticket items such as RVs are usually the first purchases consumers pass over when they face economic uncertainty or tighten their belts. So RVs — and houses, yachts, or just about any automobile — are something of a canary in the coal mine when it comes to predicting a recession.
Consider this: Of the five periods since 1980 when there were plunges in RV sales, three of those periods were followed by a recession. Statistically, that’s not enough of a reason to warrant a run on the banks and mad dash to the local survivalist store. However, it’s not exactly good news either.
It might be best to pack up the RV and go camping with your grandchildren as you wait for all this dust to settle. Better yet, go to Indiana and buy a new RV.