RVs Move America Issue: RV Industry Economic Impact Study

May 23, 2019

RVs Move America Week brings the entire RV industry together to meet with federal policymakers across Capitol Hill, while collectively building a strategic roadmap to help define future growth of the industry. During advocacy meetings, members of the RV industry will advocate for policies that directly affect the RV industry each day. Below is a deep dive into one of this year’s issues: the new RVs Move America Economic Impact Study.

Being able to accurately show Members of Congress and their staff the economic impact of the RV industry is a game changing resource for both the members of the RV industry and the government affairs staff of the association. This information will provide critical background and support for the policy issues being covered in the meetings.

Below is a detailed explanation of the study and how it was conducted and what information was included to get the final result. Understanding the basis of the study will allow advocates to better discuss its results during congressional meetings with policymakers. The final results of the study will be released during the Annual Membership Meeting and lunch on Monday, June 3, during RVs Move America Week in Washington, D.C.

The study clearly defines the RV industry: all companies involved in the manufacture, sale, rental, repair, storage and service of RVs. The RV aftermarket industry is also included, as well as the financing and insurance of RV purchases. Lastly, the study also estimates the economic impact of RV travel and RV campgrounds.

“Economic output” is a general measurement of economic impact. It is a broad and comparative measure of the economic contribution of an industry. In general, economic output represents the value of industry production calculated in terms of producer prices. Output differs depending on the industry being measured. In the case of retail and wholesale industries, output does not represent sales. It is instead similar to the accounting measure of gross margin.

Industries are linked to each other when one industry buys from another to produce its own products. Each industry in turn makes purchases from a different mix of other industries, and so on. Employees in all industries extend the economic impact when they spend their earnings. Thus, economic activity started by the RV industry generates output (and jobs) in hundreds of other industries, often in sectors and states far removed from the original economic activity. The impact of indirect firms, and the induced impact of the re-spending by employees of industry and indirect firms, is calculated using the IMPLAN input/output model of the United States.

The activities the RV industry performs such as the manufacturing, sales, rentals, repairs, services, aftermarket sales and services, financing and insuring of RVs, and RV use related expenditures account for the direct effects on the economy.

The indirect impacts occur when activities of the RV industry require purchases of goods and services such as real estate, equipment or electricity from local or regional suppliers.

Induced impacts occur when employees of the industry and those of indirect firms whose jobs are directly dependent on the RV industry spend their wages on everything from housing, to food, to entertainment and medical care. In other words, this spending, and the jobs it creates is induced by the RV industry. The ratio between induced economic and direct impact is termed the multiplier.  

The total impact is the sum of the direct, indirect and induced impacts.

This study utilizes the IMPLAN Model in order to quantify the economic impact of the RV industry on the economy of the United States. The model adopts an accounting framework through which the relationships between different inputs and outputs across industries and sectors are computed. This model can show the impact of a given economic decision – such as a factory opening - on a pre-defined, geographic region. It is based on the national income accounts generated by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA).

The IMPLAN model is designed to run based on the input of specific direct economic factors. It uses a detailed methodology to generate estimates of the other direct impacts, tax impacts and indirect and induced impacts based on these entries. In the case of the Economic Impact Study of the RV Industry, employment in all of the RV industry segments is the base starting point for the analysis, which is a defined number - not a modeled number. Facility and employment data for RV industry facilities were compiled from multiple industry sources - including directly from RV industry companies - and Infogroup.

Once the initial direct employment figures were established, they were entered into a model linked to the IMPLAN database. The IMPLAN data are used to generate estimates of direct wages and output. Wages are derived from data from the U.S. Department of Labor’s ES-202 reports that are used by IMPLAN to provide annual average wage and salary establishment counts, employment counts and payrolls at the county level. Since this data only covers payroll employees, it is modified to add information on independent workers, agricultural employees, construction workers and certain government employees. Data are then adjusted to account for counties where non-disclosure rules apply. Wage data include not only cash wages, but health and life insurance payments, retirement payments and other non-cash compensation. It includes all income paid to workers by employers.

Total output is the value of production by industry in a given state. It is estimated by IMPLAN from sources similar to those used by the BEA in its RIMS II series. Where no Census or government surveys are available, IMPLAN uses models such as the Bureau of Labor Statistics Growth model to estimate the missing output.

The model also includes information on income received by the Federal, state and local governments, and produces estimates for Federal, state and local taxes.

While IMPLAN is used to calculate the state level impacts, physical location data compiled from the multiple sources and Census data provide the basis for Congressional District level estimates. The model uses actual physical location data in order to allocate jobs – and the resulting economic activity – by physical address, or when that is not available, zip code. All indirect and induced jobs are allocated based on the percentage of a state’s employment in that sector in each of the districts. These percentages are based on Infogroup data.

The study also estimates taxes paid by the industry and its employees. Federal taxes include industry specific excise and sales taxes, business and personal income taxes, FICA, and unemployment insurance. State and local tax systems vary widely. Direct retail taxes include state and local sales taxes, license fees and applicable gross receipt taxes. The RV industry pays real estate and personal property taxes, business income taxes and other business levies that vary in each state and municipality. All entities engaged in business activity generated by the industry pay similar taxes.

For any questions on the study, please contact Monika Geraci at mgeraci@rvia.org.