Recreational vehicle shipments in the United States are expected to climb to their highest level in nearly four decades this year, according to an industry association, as millennials join baby boomers in hitting the road.
RV shipments, which include travel trailers and motorhomes, are expected to total 419,500 in 2016, a 12.1 percent jump from a year earlier, and 438,100 in 2017, the Recreation Vehicle Industry Association said on Tuesday.
"The deeply rooted appeal of the RV lifestyle attracted retiring baby boomers as well as first-time buyers..," Richard Curtin, director of the Surveys of Consumers at the University of Michigan, wrote in a study for the association.
The largest unit gains in 2016 and 2017 are expected to be in conventional travel trailers, according to the study.
Sales among millennials are expected to rise as personal income grows, the study said.
Millennials, born in 1980 through 2000, are a growing market, as they prefer to spend on experiences and adventure over material goods, according to data research organization IBIS World.
The U.S economy has regained momentum after stumbling in late 2015 and early 2016 with strength in the labor market bolstering domestic demand.
The economy is on track to grow at a 3.6 percent annualized pace in the fourth quarter after data showed domestic housing starts hit a nine-year high in October.
Quarterly results from RV manufacturers are reflecting the boom in the industry.
Thor Industries Inc (THO.N) and Winnebago Industries Inc (WGO.N) both reported quarterly revenues that beat analysts' average estimates.
"2017 will be one of the strongest years for wholesale shipments for the industry since the 1970s," Thor Industries Chief Executive Bob Martin said in a statement on Monday.
The RV industry saw shipments plunge in 2008 and 2009, as rising borrowing costs weighed on consumer confidence and crimped demand for a broad range of discretionary purchases.
President Barack Obama had then campaigned in the city of Elkhart, Indiana, a center for recreational vehicle manufacturing, promising he would do his best to revive the economy.
The industry has since rebounded, largely helped by low gasoline prices and cheap credit.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Sriraj Kalluvila)