Baird’s October Report Finds Continued Strength

RV shipment forecast conditions have dropped the last two months from historic highs, but Baird’s Recreation Team says demand through the fall remains above historical norms.

Baird’s October Recreation Sector Update found that shipment current conditions came in at a 62, down from 91 in August and 77 in September, but well ahead of the 29 rating posted in the spring at the start of the pandemic.

“Recreation participants continue to exhibit strength well into the fall season,” Baird wrote. “Many participants expect to be beneficiaries of the elevated activity longer term as first-time entrants are likely to stay in the industry.”

OEM production still is working on catching up on large backlogs, Baird said.

“However, continued strength in retail demand will cause a significant replenishment of inventory to extend well into 2021 or perhaps beyond,” the report stated.

The three- to five-year shipment outlook decreased slightly in the October report, but continues to remain positive.

“Fundamental outlook for RVs remains strong, with restocking needs providing good visibility into 2021,” the report stated.

That was evidenced by a September note from Baird Equity Research on REV Recreation Group. The note quoted the company as saying: “We’re still rolling things out, and they’ve been well received. It was disappointing that industry shows have been cancelled, would have provided good momentum. With that being said, we don’t have any 2020 inventory left, and dealers will take anything they can get.”

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