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Thursday, December 12, 2013

CANADIAN MARINAS WILL BE FEELING THE LOVE SOON

It been a rough go with most marinas for more than the past five years. I was looking at the AGF Investments Illustrated Downturns & Recoveries the other day and the 2008/2009 recession was a short deep recession (S&P/TSX down 43%) with a very long recovery. We are running towards a 5 year recovery period ... a longer recovery period than the Great Depression! Our recent recession, although short, actually cut deeper on the S&P/TSX by a percent more than the Great Depression. I have heard some say the marina industry is never coming back to what it has been. It may seem like that for some operators over the last number of years but it is coming back – and it’s coming back soon.

Markets have done their job and have led out. Housing in Canada hardly took a pause, and real estate returns have been excellent in most areas these past few years. More often than not, companies around the world have their balance sheets in great shape and they are poised to expand if they haven’t started already. On the DOW 2/3 of companies reporting earnings are beating their numbers. Job numbers are improving albeit sluggishly. This will change for the positive as business begins to invest and ramp up production and inventories. Overall the economy in Canada will expand at just under 3% next year and the US economy will expand at a significantly greater pace ultimately passing more trade to Canada as things heat up. Money is cheap and will likely remain cheap for a few more years. The stage is set.

Disposable income recreation, like boating, will start to grow in 2014. Already we can see expansion of sales at the US shows and the massive amount of used inventory on the market is gradually getting sopped up. Mothballed boats will be made ship shape and will be back at the docks. By 2015 we predict marinas will have their businesses normalize and most of those empty slips will be full. There will be a movement to even bigger recreation boats on the Great Lakes and pent up demand for boat repairs, retrofits and new electronics will take off. It may not be like the 70’s when marinas had mile long waiting lists, but it will be a damn site better than it has been over the last 10 years. And it’s about time - marinas need to feel the love too!

Posted by at 3:42 PM
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