RVDA of Canada released its 2022 Annual Economic Review.
Intended to deliver a comprehensive overview of economic indicators affecting the Canadian RV industry, the report can provide members with current economic information that may shed light on industry and general economic conditions, RVDA said.
According to the review, fourth quarter sales of all RV types were down 20.9%. Unchanged from last quarter, the total RV sales saw declines in year-over-year sales, with a 17.8% decrease from 53,183 in 2021, to 43,711 in 2022. All product types have seen declines in 2022, except for Type C motor homes and park models.
Despite unit sales declining, 2022 saw an 11.1% annual gain in sales revenue, nearing $4.3 billion. This was due to sales growth in both second and third quarters, the association said.
“Our 2022 annual economic review reports that tourism spending is on the rise; however, we have yet to reattain pre-pandemic spend levels,” said Eleonore Hamm, RVDA of Canada president. “With forecasts for greater travel from US and international visitors in 2023, we are well-positioned for continued tourism recovery due to pent-up demand, which bodes well for our industry.”
RVDA said increasing interest rates, inflation slowing and the Canadian, U.S. and European economies entering a recession accompanied a downturn in economic sentiment during 2022’s last quarter.
The Bank of Canada is expected to begin reversing its policy stance by 2023’s year end, the report said. Monetary easing is expected to continue throughout 2024 as the Bank of Canada slowly brings interest rates back down. With the economy shrinking, inflation is expected to decelerate sharply in 2023 after slowing steadily since hitting 8.1% in June 2022.
Traditionally, recessions are associated with job losses and cautious business decisions, the review said, however this is not the case with payroll expansion, partially due to labor scarcity.
The association said employers are expected to be reluctant to let employees go due to labor scarcity, especially as the economy begins to recover in 2024.
For the fourth consecutive quarter, businesses anticipate their sales growth will slow. For more than one-third of all companies, this is after significant sales increases over the past year. Close to 3-in-10 businesses—considerably more than usual—expect their sales to decrease, with most attributing the decline to weaker domestic demand, the report said.
Businesses expect sales to continue to grow overall, RVDA of Canada said. Businesses tied to commodities expect robust demand. A few exporters reported a weaker Canada–US exchange rate has a favorable effect on their sales outlook.