As unemployment increases, the stock market stumbles and the American economy faces difficult times, SEMA members have the opportunity to appreciate the relatively stable specialty–equipment market. According to SEMA market research from the past 20 years, despite recessions in the economy, the industry has reported consistent positive growth with the only exception being 1991.
To demonstrate this stability, we can take a look at the last two recessions that occurred. From July 1990 to March 1991, the United States GDP decreased by a harsh 3.0%. During the same time, the specialty-equipment market grew by nearly 10% in 1990. Ironically, as the U.S. economy recovered from the recession, fueled by spending from the Gulf War, the war itself caused the specialty-equipment market to fall by 4.2%, as the industry’s customers were serving in the military.
The second recent recession occurred from November 2001 to November 2002. During the time that U.S. GDP declined, the specialty-equipment market was growing. In 2001, the industry experienced growth of 4.2%, and in 2002, that of 3.7%.
Explanations of this stability could include the social and demographic makeup of specialty-equipment consumers. Enthusiasts, as many consumers are often called, generally have higher disposable incomes. SEMA reports the average enthusiast household income being at around $96,000 compared to the U.S. average reported by government census in 2006 of $46,352. In addition, specialty equipment can be seen as a luxury good, of which demand increases proportionally to income.
Despite warnings that the economy is falling into a recession, specialty-equipment manufacturers can remain calm knowing that market growth has been just as strong as ever.
For more specialty-market research and insight, visit www.sema.org/research.