Summer RV’ing
The Hungry Beast hits the road
It’s summer time and in addition to golfing and air travel, the Hungry Beast is jumping into the camper and is off to see the country. The RV Industry Association anticipates that $45 million Americans will travel by RV this summer.1 Does this mean that RV’ing is yet one more example of YOLO-spending? Or, does this sort of expenditure matter much for the economy?
With respect to the latter, economist Michael Hicks makes a strong case that it certainly does, providing analysis that spending on RVs is an important business cycle indicator (analysis that caught the attention of many media outlets—see here, here and here for three of many examples).2
On the YOLO-question, let’s take a look at some data!
Grand Canyon or Bust!
Figure 1 displays the inflation-adjusted dollar value of RV’ing since 2017 (as computed by the Bureau of Economic Analysis).
From 2017 to 2022 the value of RV’ing ranged from about $20 billion and almost $25 billion.3 The peak, of course, occurred in 2021. Those amounts comprised about 4 to 6 percent of the total outdoor recreation.
With respect to growth rates, Table 1 displays the growth rate of RV’ing against the total outdoor recreation over time (computed from the BEA data; values for 2023 are not yet available).
A few things stand out:
In 2020 RV’ing barely dropped from its 2019 value; while total outdoor recreation spending was way down.
In 2021 both RV spending and total outdoor recreation spending jumped back up at about the same rate.
In 2022 total outdoor recreation spending increased by 5 percent, yet RV’ing dropped by 5 percent.
Based on this data up through 2022, if there was YOLO’ing going on with RV’ing, it was in 2021.4 The 5 percent decline of RV’ing in 2022 clearly does not suggest YOLO-type behavior continued. However, 2022 was low-growth year overall, so perhaps the decline is not surprising. Unfortunately the BEA data only goes through 2022. So, for a more up-to-date look at view, we can use a different series.
Pump the Breaks?
For an updated look at the state of the RV industry, we can utilize the “Index of Industrial Production: Travel Trailer and Camper,” provided by the Federal Reserve Board of Governors as part of their G.17 data release.5 Figure 2 displays the month-to-month percentage change of this index from January 2019 through April of this year.
The ups and downs of the series are evocative of many other macroeconomic series—dramatic ups and downs in 2020 and 2021, followed by more “normal” ups and downs—like we have seen with total consumer spending. Like total consumer spending, 2022 was the worst year for RV’ing, with an average monthly decline of 5.6 percent.
Yet, things have been much better since. The average increases in 2023 and (so far) 2024 of 2.4 and 4.6 percent, respectively, are much higher than the two-decade average prior to 2020 (0.6 percent as annotated on the figure).
That is not to say the industry is booming like it did in 2021 or even before (the total volume of RV production is not as high as prior to 2022, as can be seen here). But, the pace of production in 2023 and 2024 is pretty hot by historical comparison (and the RV Industry Association expects things to continue to grow in 2025).
Break out the S’mores
The BEA data (Figure 1) suggest that if, in fact, RV’ing has been motivated by YOLO’ing, that was most likely the case in 2021. That motivation did not carry forward to 2022.
Yet, that source does not capture what has been going on since 2022. Based on the data shown in Figure 2, RV production in 2023 and so far in 2024 has definitely picked up. Whether or not that is driven by a “live for the now” attitude is uncertain, of course.6
However, the accelerated growth of RV production in 2023 and 2024 may be telling—where RV’ers go, so goes the economy.
RV is short for recreational vehicle and includes travel trailers, the campers you tow behind a truck, and motorhomes, the drivable RVs.
Hat tip to a friend and loyal Macrosight reader for alerting Macrosight to Michael Hick’s insights on RV’ing. Michael writes the Substack blog “Country Economist.”
On a personal note, in the winter of 2021 Macrosight and his wife purchased a travel trailer and toured the country with it during the summer of 2021 (with Macrosight progeny and dog included).
The index is a measure of the output of the industrial sector in the United States. The Fed describes the G.17 release as follows: “The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities”.
To know for sure someone or entity could survey RV’ers. Macrosight leave that up to the likes of the RV Industry Association and similar trade groups.