Just below Michigan in northern Indiana sits the RV capital of the world. The city of Elkhart earned that moniker for the dominant role it plays in the production of recreational vehicles, with nearly 90 per cent of all units in the US and Canada manufactured there or in the surrounding area, according to the RV Industry Association.

RV enthusiasts are not the only ones keeping close tabs on Elkhart, which boasts a Hall of Fame dedicated to the industry. Economists do too. That is because the RV is the “classic disposable income and interest rate sensitive item”, Michael Hicks, an economics professor at Indiana’s Ball State University, says.

A discretionary purchase that is typically financed with borrowed money, demand for RVs is acutely sensitive to business cycles, meaning that more often than not a cooling off typically augurs a weaker economic backdrop. Hicks has even gone so far as to say that RV sales are superior to economists for forecasting recessions. Right now, he says it is a close call over whether there will be a downturn.

Source FT https://archive.is/wNZN2