Tristin Burdick | July 30, 2024
In June, 46% of powersports consumers reported they could save a little after covering their expenses. By July, this figure had dropped to 31%, indicating an increased financial strain. Additionally, those struggling to make ends meet rose from 2% to 5%. This suggests that consumers are tightening their finances while feeling the economic pinch. I suspect inflation is a big contributing factor. Despite the Federal Reserve's efforts to manage inflation, its effects on the price tag for goods and services lag behind as markets adjust.
Despite feeling the economic squeeze, powersports consumers have maintained or even increased their spending in several areas. Discretionary goods spending rose by 9%, transportation costs by 8%, utility expenses by 5%, and debt repayment by 7%. These factors are crucial for the industry which heavily relies on discretionary spending for growth.
Financial goals among powersports consumers have seen a shift. Increasing retirement savings remains the primary goal, aligning with this demographic's average age of 55. However, there has been a significant uptick in intentions to invest in stocks, bonds, gold, or other assets (+6%), pay off debt (+2%), and plan for early retirement (+3%).
These adjustments indicate a proactive approach to long-term financial stability. As many consumers approach or enter retirement, the emphasis on investments and debt reduction aligns with a desire to mitigate financial risks.
There has been a slight decline in confidence regarding handling unexpected expenses, with 55% feeling very confident in June, dropping to 48% in July. This decline is consistent with the overall theme of financial tightening and reflects a cautious approach to financial planning.
Despite these challenges, most powersports consumers remain optimistic about their future financial situation. They expect improvements in their financial situation over the next six months, suggesting a positive outlook that could drive future market engagement. This optimism is echoed by the Consumer Confidence Index, which shows a gradual improvement in consumer confidence as inflation pressures ease and economic policies aim to stabilize the market. In July, the Consumer Confidence Index rose to 100.3, from a previous downtrend in June at 97.8.
| Most important economic problem facing the country | Jun-24 | Jul-24 | Diff |
| High cost of living/inflation | 24.8% | 25.7% | 0.8% |
| Taxes | 15.9% | 16.3% | 0.4% |
| Gap between the poor and the rich | 4.3% | 9.0% | 4.7% |
| Federal budget/deficit | 9.3% | 8.0% | -1.3% |
| Healthcare costs | 15.9% | 7.3% | -8.6% |
| Fuel/Oil prices | 5.6% | 7.3% | 1.7% |
| Interest rates | 1.3% | 5.7% | 4.3% |
| Education costs | 1.7% | 3.7% | 2.0% |
| Housing affordability | 3.6% | 3.7% | 0.0% |
| Environmental concerns and sustainability | 9.6% | 3.3% | -6.3% |
| Retirement savings and social security | 2.0% | 2.7% | 0.7% |
| Supply chain disruptions | 0.7% | 1.7% | 1.0% |
| Recession | 2.0% | 1.3% | -0.7% |
| Trade policies | 1.0% | 1.0% | 0.0% |
| Unemployment/Jobs | 0.3% | 1.0% | 0.7% |
| None of these | 0.3% | 1.0% | 0.7% |
| Wage issues | 0.7% | 0.7% | 0.0% |
| Access to credit and loans | 1.0% | 0.7% | -0.3% |
While powersports consumers generally hold a positive outlook on the economy, key concerns persist. These include the high cost of living/inflation (26%), taxes (16%), the gap between the rich and poor (9%, up 5% from June), and the federal budget/deficit (8%).
