Boat Builders

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 837 boat builders in the US design, manufacture, and market boats used primarily for personal and recreational purposes. Major product categories include power boats, sailboats, kayaks, canoes, and rowboats. Power boats include boats with inboard, outboard, stern drive, and jet powered engines. The power boat category includes Personal Water Craft (PWC), such as a jet ski. The retail price for a new fishing boat ranges $25,000 - $100,000, but luxury yachts can retail for millions of dollars.

Variability in Costs

Variability in the cost of materials and components affect margins and profitability for boat builders.

Competition from Used Boats

Boat builders compete with the used boat market, which appeals to deal-seeking buyers and new boaters looking to minimize their investment.

Industry size & Structure

The average boat builder operates out of a single location, employs fewer than 20 workers, and generates $12 million annually.

    • The boat building industry consists of 837 firms that employ 51,400 workers and generate about $10 billion annually.
    • The industry is concentrated; the top 50 companies account for about 74.5% of industry revenue.
    • Large companies include Brunswick, Bombardier, Viking Yacht Company, and Marine Products Corporation. Some large companies have international operations.
    • The US became a net importer of boats in 2015.
                              Industry Forecast
                              Boat Builders Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Jan 10, 2024 - Higher Interest Rates Dent Sales in 2023
                              • New powerboat retail unit sales are expected to reach an estimated 269,000 units sold in 2023, the lowest level since 2013, according to data from the National Marine Manufacturers Association (NMMA) in the Union Leader. The decline follows a period of continued inflation and higher consumer borrowing costs; demand is also lower following a wave of boat sales in 2021 and 2022 during the COVID-19 pandemic. The industry is expected to sell about 900,000 used boats in 2023, the lowest levels for pre-owned vessels since 2011, according to NMMA data. The market is still seeing a lower supply of used boats after consumers depleted the supply of used boats when new boats were not readily available during the pandemic due to production issues.
                              • Consumer confidence levels rose in December 2023 for the second month in a row, following three consecutive months of declines, according to data from The Conference Board. The Conference Board’s consumer confidence index increased to 110.7 in December 2023 from 101 in November 2023. According to Dana Peterson, Chief Economist at The Conference Board, “December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns.” Peterson added that the gains in consumer confidence were largest in householders aged 35-54 and households with income levels of $125,000 and above. Plans to purchase homes, autos, and large appliances rose moderately on a month-to-month basis as interest rates moderated.
                              • Lower consumer spending, higher prices, and competitive pressures are expected to limit growth in the US boat builders industry, which is projected to grow at an over 2% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is slower than the projected growth of the overall economy. The forecast follows several years of sales volatility during the pandemic in 2020 (-4.8%), 2021 (13.9%), and 2022 (15%).
                              • US manufacturing activity contracted in December 2023, falling below the baseline for growth for the fourteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.4% in December, up from the 46.7% recorded in November. A reading above 50% indicates manufacturing expansion. December’s New Orders Index remained in the contraction zone at 47.1%. The December Production Index was 50.3%, up from November’s 48.5%. Only one manufacturing industry tracked by the ISM reported growth in December: Primary Metals. The industries reporting contraction in December were Printing & Related Support Activities; Apparel, Leather & Allied Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; Textile Mills; Petroleum & Coal Products; Paper Products; Wood Products; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Furniture & Related Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Chemical Products.
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