ELKHART, Ind. (AP) — Economists warn that a downturn in shipments of recreational vehicles from northern Indiana the county that calls itself the "RV Capital of the World" suggests an impending recession.  More than 80% of recreational vehicles sold in the United States are manufactured in Indiana, and about 65% are from Elkhart County, according to data from the RV Industry Association.
Wholesale shipments of motorhomes are down 20.3% so far this year, the Indianapolis Star reported. Companies such as Elkhart-based Thor Industries Inc. have cut production and cut down the working week to slow production.
Ball State University economist Michael Hicks said consumers don't buy motorhomes and other big ticket items when the money is tight, so economists are watching for declines in the RV sector and a decline in car sales as signals of a contracting US economy.
Total US car sales fell 1
Also regarding disruptions in international trade due to tariffs on important markets such as China, Mexico and Canada.
"There is a wild card of tariffs and trade conflict thrown into the mix, and it is difficult to tease out how much impact they are having right now," said Kevin Broom, spokesman for the RV Industry Association.
The association predicts that shipments for the year will be down by about 14% by the end of 2019 RV ships Fetches have fallen for five periods since 1981, but only three of those periods were followed by downturns, Broom said.
In Elkhart County alone, the RV industry employs tens of thousands of workers. The county unemployment rate rose to 3% in June, up from 2.8% the previous year. And while this is below the state and national averages, the average number of hours worked in the county fell, Hicks said.
But that's a big turnaround from when Elkhart County's unemployment hit almost 19 percent in early 2009 when the recession caused RV sales to crash.
Chris Stager, president and CEO of the Economic Development Corporation of Elkhart County, said he has heard anecdotal stories about RV manufacturers implementing long periods of "relaxed planning."
Still, he prefers optimism.
"(RV shipments) have in many cases historically been an indicator of some trends in the national economy," Stager said. "But I prefer to stay positive about the national situation and how it can play out here."