The Economy Is Bad And That's Affecting Powersport Sales and Optimism

If you haven't noticed, the economy isn't great for the vast majority of folks. Inflation is still sky-high; wages have been stagnant for the vast majority of the planet since the 1990s; tariffs have caused everything to become more expensive; gasoline is at an all-time high due to idiotic Middle East conflicts and their subsequent fallout; and jobs are...being held onto for dear life, which is never good for anyone. 

Add that interest rates are trash, and average new vehicle costs and monthly payments are through the roof, and, well, yeah, things aren't all sunshine and roses for most folks. That reality, however, is finally starting to affect the optimism of the powersports industry, which is known to be an indicator of consumer confidence; as for the most part, these machines and their accessories are toys.

They're not necessary for everyday life. And that reality seems to be finally coming home to roost according to the Motorcycle Industry Council and the University of Michigan, with the latter releasing a new study on consumer confidence and spending habits. 

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In the Motorcycle Industry Council's September-dated RideReport newsletter—I'll let them slide for mimicking our name for now—"Two closely watched measures of U.S. consumer attitudes showed growing caution in August, particularly around expectations for the months ahead."

It then cited the University of Michigan and its Surveys of Consumers, stating that it "showed the Index of Consumer Sentiment falling 6.3% in August to 51.7, down 11.2% from a year earlier. Consumers expressed greater concern about future business conditions and continued pressure from the cost of living. Year-ahead inflation expectations eased slightly to 4.0% from 4.2% in July. Preliminary September results showed sentiment falling another 7.5% to 47.8, while year-ahead inflation expectations rose to 4.6%. The Conference Board also found consumers becoming less optimistic about the future."

All that's to say is that when consumer confidence falls, and the aforementioned factors remain in place that depress an economy, people tend to rein in their spending as much as possible, as they fear a recession, they fear unemployment, they fear the uncertainty that could likely befall the markets and economy tumbling any further. We saw this during the last recession in 2008, when everything crashed, everyone was hurt, and the market for powersports vehicles fell out of the floor. It wasn't good and really took until the pandemic to bring it back to life. 

As such, the MIC, as well as dealership groups like Powersports Business, are cautioning their clients to keep their eyes on the horizon, while also doing their best to boost confidence and engagement with their customers so they keep coming back. For right now, however, consumers haven't reeled back that spending, with the overall powersports industry actually up this year over last year. 

But with rising gas prices and more, who's to say the good times are going to last all that much longer. I'm looking at you, looming AI bubble. 

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