From cashflow to ordering and managing inventory, intelligently forecasting equipment sales are critical for dealers’ financial planning. Unlike dealerships catering to production farming that can use commodity pricing as a signpost for industry trends, for those specializing in rural lifestyle markets economic indicators are not so clear cut.
Rural lifestyle dealers serve a highly segmented customer base, from hobby farmers and large property owners to municipalities and parks to turf, lawn care and landscapers to construction contractors and “others.”
For these dealers, examining their own past and current sales is absolutely necessary, but getting a handle on overall industry trends can be challenging, to say the least.
Industry forecasts are extremely helpful to get a good picture of what colleagues and peers are anticipating, but spotting larger, customer trends also plays an important role in overall business planning. (For the industry forecast, please see the results of Rural Lifestyle Dealer’s 2017 Business Trends & Outlook survey.)
To determine which market trends could be helpful to rural lifestyle equipment retailers in forecasting sales, we selected 6 different U.S. economic indicators that can impact industry sales and charted them against compact tractor (under 40 horsepower) sales during the 12 year period of 2004-2015. These included:
- Existing single family home sales
- New single family home sales
- U.S. employment in golf courses and country clubs
- U.S. employment in landscaping services
- Non-auto durable goods spending
- Disposable personal income.
Four of the charts are shown below. The other two charts can be found at www.RuralLifestyleDealer.com. As shown in the charts, some economic measures correlate very well with small tractor sales, while others provide little or no insight for planning purposes.
Dealers looking for macro-trends to help guide their business planning should determine for their operations which of these best apply to their operations.