Market Snapshot: Sports and Recreation

Sales are down, but not out, especially for plastics-intensive products in this category.

The good news in April’s report on 2007 sales for the industry from the Sporting Goods Manufacturers Assn. (SGMA; Washington DC) is that U.S. growth rang in at 3.3%, outperforming the annual GDP for nondurable goods at 2.2%. Unfortunately, the report also noted that sales growth is falling year over year, from 6.8% in 2005 and 5.8% in 2006. Data found in SGMA’s 2008 Manufacturers’ Sales By Category Report is based on the annual SGMA State of the Industry survey, discussions with leading industry executives, and an analysis of industry sales reports from various sources.

In 2007, the sporting goods industry saw continued strength in athletic footwear, licensed athletic merchandise, fishing, firearms, and martial arts. Stable growth in fitness equipment, sports apparel, and team sports accompanied the larger gains.

Plastics-intensive products in this market include fitness equipment, both consumer and commercial, as well as footwear, watercraft, ATVs, and ski/snowboard bindings and boots. According to the SGMA survey, sales of fitness equipment and gear are being buoyed by the continued interest in combating adult and childhood obesity, as well as growth in an emerging vertical market that includes nontraditional fitness centers.

Sales in this industry for the first three quarters of 2007 logged growth rates of 6% or higher, based on the data SGMA collected. In Q4, however, reduced consumer spending caused significantly lower spending in this area due to concerns about the overall economy, a slowdown that affected all segments of the economy.

SGMA’s report says that GDP forecasts and projections of consumer spending by the Federal government do not indicate a quick or large upturn in GDP for 2008. On the bright side, says SGMA, martial arts and fitness equipment will continue to be strong as the result of continued promotions and the national momentum to get fit.

Specialty applications continue to appear on the scene, often intended to target professional or semiprofessional athletes. While volumes are low and prices can be high, these products often represent opportunities for molders in the United States. For instance, Tag Wheels (Newport Beach, CA) manufactures FRX5 wheels using a lost-core molding process that makes it possible to form the complex geometry and strong hollow structure. A metal mandrel formed from a low-melt-point alloy is overmolded with nylon (a toughened grade of glass-filled Zytel from DuPont) before being melted out to create the hollow composite wheel.

Another recent specialty product from the cycling industry appears on Tour de France-style road bicycles from SRAM (Chicago, IL). Designers wanted a 2-mm-thick “skin” to cover the Double Tap Road gear shifter, and used a TPV material (Santoprene TPV 121-50M100, ExxonMobil) to create the comfortable grip that also provides enough friction to keep riders from losing their grip.

Taking a look at some of the larger OEMs in the fitness equipment industry offers some positive spin for the future. Nautilus and Cybex, both makers of commercial gym equipment, are among the top 10 revenue earners in the industry this year, according to reports from The Wall Street Journal.