It will be harder to fight than the last one, says Ryan Avent
JUST SOUTH of Indiana’s border with Michigan lies the city of
Elkhart, with a population of just over 50,000. Apart from a small,
shop-lined high street near where one river, the Elkhart, flows into
another, the St Joseph, the city is mostly shapeless, tree-lined and
suburban. Scattered around the outskirts are the factories of several of
America’s largest producers of recreational vehicles (RVs). Rows of the
finished products rest outside the giant sheds in which they are made.
Modern
RVs are impressive, leather-upholstered land yachts fitted with
flat-screen televisions and gas fireplaces, the perfect vessels in which
to navigate the American continent. The RV business is one of the
economy’s most strongly cyclical. Sales of big-ticket items like homes
and cars inevitably rise and fall with the business cycle, but RVs are
especially susceptible to such swings. It is only once cars and homes
have been upgraded that consumers consider splashing out on rolling
living quarters. And when financial fear stalks the land, RV-makers have
a particularly hard time.
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Source: The Economist
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