As we look at the current economic crisis as it relates to the RV industry, it may be difficult to find any good news; however, there are promising signs.

Anyone who has been in the industry for 25 years or more has seen their share of ups and downs. The late 1970s and early 1980s nearly brought the industry to its knees with oil embargo and fuel shortages. The recession of early 1990s was another period that tested the industry's intestinal fortitude. However, the current ecomonic condition may be the industry's biggest test to date.

The President and Treasurer Secretary have painted a pretty dismal picture in their pleas to Congress to pass the $700 billion recovery package, suggesting that without it, there might be a total ecomonic collapse, not only in the U.S., but worldwide. As we publish this, the President has just signed the recovery package bill.

And the question remains whether or not we are in a "recession" or not. The standard definition of a recession is a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters. However, if you a one of those 750,000 people who have lost jobs this year, the question is not argueable -- this is a recession.

The facts that consumer confidence is in the pits and fuel prices have gone through the ceiling has already taken a heavy toll. RV shipments from manufacturers to dealers through August is already down 22.7% from this point last year and the lowest eight month start since 1997. The hardest hit segment is motorhomes down nearly 40% from last year at this time.

We've seen more bankruptcies of RV manufacturers in 2008 than in any period since the late 1970s and early 1980s, including National RV, Alfa Leisure, Travel Supreme, Western RV and rumors have it that Teton Homes is also out of business.

Add to that the current economic picture and the resulting credit crunch, it doesn't take a modern day Nostradamus to predict that more manufacturers, dealers and suppliers might also fall by the wayside before this is over.

Update Since we published this article, RV Stocks have continued to plummet in a volatile market. To see the current status of public RV stock prices, click the link below. See Current RV Stock Prices

In late September financial services and investment firm Robert W. Baird & Co. downgraded three RV manufacturers, saying falling oil prices and early investment in cyclicals has boosted valuations, but fundamentals remain "dreadful."

The brokerage cut Monaco to "neutral" from "outperform," while Thor Industries Inc and Winnebago Industries Inc (WGO) were downgraded to "underperform" from "neutral."

One-Year Comparison of RV Companies' Stock Prices Company (As of 10/10/2008) Oct 2008 Oct 2007 % Change COACHMEN IND INC (NYSE: COA) $2.07 $6.50 -68.2% FLEETWOOD ENTERPRISE (NYSE: FLE) $0.62 $10.00 -93.8% MONACO COACH CP (NYSE: MNC) $1.28 $14.89 -91.4% SKYLINE CP (NYSE: SKY) $19.85 $36.28 -45.3% THOR INDS INC (NYSE: THO) $20.66 $52.31 -60.5% WINNEBAGO IND INC (NYSE: WGO) $9.68 $32.42 -70.1% COAST DISTRIBUT SYS (AMEX: CRV) $2.70 $6.76 -60.1% DREW INDUSTRIES INC (NYSE: DW) $13.09 $44.17 -70.4% SPARTAN MOTORS INC (NasdaqGS: SPAR) $2.67 $18.45 -85.5%

We've seen stock values of public companies plunge downward like an Olympic ski slope. Fleetwood (FLE) and Monaco(MNC) have been hit the hardest. The value of a share of Fleetwood stock that sold for $10 in October 2007 is only worth $.62 now -- a drop and nearly 94%. Monaco hasn't faired much better, down 91% in one year.

It's ironic to suggest that the big winners this year are Skyline Corp (SKY) down 45% and Thor Industries (THO) only down 60.5%.

Privately held companies cannot be doing any better.

High fuel prices, tight credit and falling home values continue to have a negative impact on consumer spending power.

So what are the promising signs in this rather dismal picture?

David Skogebo, general manager of World Wide RV in Mesa, Arizona, told RV News, "We are getting buyers, but unless they have a credit score of 750 or better, banks are not approving credit."

This is in spite of the credit worthiness of RV consumers -- Loans to RV buyers remains at the top of all credit seekers. The delinquency rate on RV loans was 0.95% from 1999-2007 vs. 2.0% for other consumer loans, according to the American Bankers Association Quarterly Delinquency Bulletin.

Don Lee, general manager of Camper Outlet in Tualatin, Oregon, confirms Skogebo's findings. He told RV News, "Our sales are suffering because of the scarcity of credit."

Lee also says there has been a dramatic shift over the past year in what the RV buyer is looking for. He said, "Today, buyers are looking at lighter weight, more fuel efficient RVs."

So that hopeful sign we promised is that people still want to experience the RV lifestyle and when this economic crisis eases there will be a lot of pent up demand. That means that those manufacturers and dealers that survive should benefit from a surge in RV sales.

And there are other hopeful signs.

Despite high fuel prices and a sluggish economy, RV rentals have grown 18% in 2008, according to a survey of RV rental companies conducted by the Recreation Vehicle Rental Association.

Dr. Richard Curtin, Director of Consumer Surveys at the University of Michigan and RVIA consultant in his 2009 forecast said, "Tight credit is causing RV buyers to delay purchases and RV dealers to keep inventories low. RV shipments are anticipated to begin improving in mid-2009 after a slow start to the year, as pent-up demand builds and economic conditions improve. The initial improvement is projected to be concentrated in conventional and fifth wheel travel trailers. Shipments are expected to continue to be lower in 2009 due to high credit standards, increasing food and fuel prices, falling employment, and continued declines in household wealth and home prices. Dr. Curtin predicts 2009 shipments will total 254,700, about 5% lower than the projected total for 2008."

He also believes the RV marketplace continues to look favorable in the long-term. Dr. Curtin projects the number of RV owning households will rise to 8.5 million by 2010.

In its October 2008 RV Business Indicators, RVIA said, "Population and demographic trends favor long-term RV market growth. Buyers aged 35-54 are the largest segment of RV owners, according to the 2005 University of Michigan study commissioned by RVIA. The demographic tidal wave of prime RV buyers remains strongly in the strongest RV ownership age groups. Every day, 11,000 Americans turn 50, according to U.S. Census figures.

"RV sales will benefit as aging baby-boomers continue to enter the age range in which RV ownership is highest. According to Dr. Curtin, by the end of the decade, the number of consumers aged 50 to 64 will total 57 million — 38% higher than in 2000. Today one-in-10 vehicle-owning households in that age group own at least one RV."

The challenge for RV companies over next few months is to survive. That means not taking unnecessary business risks and to the extent possible remain loyal to employees and service former customers -- and oh yes, treating new customers and prospective buyers like kings.

When this turns around, and it always does, the rewards should be significant.