This Overlooked Segment of the Construction Sector Is Going Great

Tucked in between Homebuilders, Maintenance, Heavy Construction, Concrete, Wood and a host of other construction industries is a small but happening industry called Building Products - Mobile Homes and RV Builders. The industry has a Zacks Rank of 9, placing it at the top 4% of 250+ Zacks-classified industries. So, I thought it could be worth digging into.

And sure enough, it turns out that this is one of the industries that has benefited from the pandemic. Sure, there was the initial hesitation when the pandemic hit in late March, which is why April shipments were most disappointing. But sales started recovering in May and registered year-over-year growth from the following month. Recreational Vehicle (RV) makers have not looked back, as people continued to favor their own road transport to experience the outdoors with their families and friends. As a result, total RV shipments grew 6.0% in 2020.

This year has largely been a continuation of the trend, but at an accelerated pace, as vaccinations are making people bolder about going outdoors. So first quarter shipments grew 47.9% year over year to top the previous all-time high set in 1Q2018 by nearly 10%. And it was followed by further strength in the June quarter. The 619.9%, 75.9% and 25.3% shipments growth in April, May and June of this year may have been partially because of easy comps. But there was also real growth because total shipments were 2% higher than the March quarter, setting a new all-time high.

What’s more, RV Industry Association surveys seem to indicate that although the pandemic did drive more people toward RVs, there are other more compelling reasons, such as the love of road trips, a desire to travel in comfort, wanting to explore the great outdoors and the ability to use an RV as a basecamp for other outdoor recreation activities. Of course, being closer to nature also improves mental and physical well-being, which are things that younger travelers are quite keen on. These reasons may be behind the industry’s consistent long-term growth of 26% over the last 10 years and 62% over the last 20 years (Go RVing study). They’re also likely the reasons why 9.6 million households plan to buy an RV in the next five years.

Read the rest of the article from Zacks here.