Experts predict 'bright future' for US economy as RV industry drives into 'sweet spot'

Despite crippling inflation and high interest rates, Americans have been persistent consumers when it comes to travel, particularly following the COVID-19 pandemic.

RV travel saw a dramatic surge in the wake of COVID lockdowns, and as the industry returns to the pre-pandemic "sweet spot," the bellwether boasts a "bright future" for the U.S. economy. 

"We are not seeing a looming crisis. We see [the] long term health of the industry, and there are things that we can't control - the election cycle, inflation, and interest rates. But if those move in the right direction, which we think they are, then definitely looking at a bright future," RV Industry Association (RVIA) spokesperson Monika Geraci told Fox News Digital.

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While the global pandemic prompted lockdowns and largely suspended travel, Americans turned to RVs. In 2021, RV shipments reached historic levels at over 600,000 according to RVIA data.

Since then, shipments and sales have declined. In 2023, there were only 313,174 shipments recorded. Monthly data, however, shows RV shipments in 2024 are outpacing last year's. May 2024 saw an increase of 7.2% compared to the 30,919 units shipped in May 2023.

"What we have seen ebb would be the sales and the shipments, because so many people did buy RVs in those few years at the height of the pandemic. We're coming back down to earth, if you will," Geraci said.

"We're settling back into… more of our regular cycle, production outpacing sales for six months and then sales outpacing production… We know that we're getting back to that sweet spot where we're replenishing dealers at the right level."

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While shipments are up after dipping in 2023, sales have been down since the pandemic swell. 

"Two years ago, when the Fed started raising interest rates, RV sales slowed down significantly, and they've been running at [a] recession-level rate really for the last two years," Blue Compass CEO Jon Ferrando told Fox News Digital.

"2021 set an all-time record for RV sales in the US. 515,000 new RVs were sold in the US., and today we're running around a 340,000 run rate, really impacted by inflation, high interest rates and consumer sentiment."

Ferrando added the sales "slowdown" is expected to hit a historic point, with 2024 predicted to be the lowest year for sales in a decade.

Given the contrast between RV shipments and sales, the economic bellwether sends a "mixed" message about the long-term economy. 

"[RVs] do make for a good indicator on how people are feeling about the economy. If people are feeling comfortable in their jobs, comfortable in their income, feeling comfortable, they're more likely to go out and make that purchase," Geraci said.

"What we're seeing now, which… kind of goes to this economy as a whole, is it a good economy? Is it a bad economy?… It's a mixed bag."

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Geraci and Ferrando agreed that the primary "catalyst" for a better-performing RV industry and the overall economy is lowering interest rates. 

Since the Fed began its aggressive hike campaign in 2021, interest rates have become an added stressor for consumers already reeling under the weight of inflation. 

"Purchase intent is still there. But we know from a lot of anecdotes and talking with dealers that the high interest rates are impeding people's ability to follow through on that purchase intent," Geraci explained. 

Most investors now expect the Fed to begin cutting rates in September or November and are penciling in just two reductions this year – a dramatic shift from the start of the year, when they anticipated six rate cuts beginning as soon as March.

Ferrando said he still "sees us in a waiting game."

"I see pent-up demand, and we just need a catalyst," Ferrando said. "I see sales taking off strongly in 2025 and beyond."

The Blue Compass founder argued that the catalyst could be the Fed lowering rates, prompting better consumer sentiment about the state of the country and the economy. 

"A lot of growing consensus in the industry is that as interest rates come down, which... maybe we're more hopeful than we were a few weeks ago, that maybe interest rates will start to come down here in the next couple of months. As interest rates come down, we do expect both shipments and sales to continue to rise," Geraci said. "That should be a good sign for the overall economy."

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FOX Business' Megan Henney contributed to this report.