President Obama and Congress have signed off on extending the debt ceiling through to February and the US has breathed a big sigh of relief that the country will not have defaulted on its debt and the government is no longer in shutdown. But the new legislation is only a temporary solution that simply delays the US budget dispute and this begs the question as to whether buyers will be left cautious over their spending; an unwelcome thought in light of the upcoming Fort Lauderdale International Boat Show (FLIBS).
Standard & Poor have released a statement following the government's 11th-hour decision, describing that the prospect of a new debt ceiling next year could weigh on consumer confidence. "If people are afraid that the government policy brinksmanship will resurface again, and with the risk of another shutdown or worse, they'll remain afraid to open up their checkbooks," the agency stated. "That points to another humbug holiday season."

Fort Lauderdale Boat Show. Credit: Brooke Shaw

With FLIBS just around the corner, and the heralded success of the Monaco Yacht Show still ringing in the industry's ears, exhibitors will be hoping for a show full of signed deals, sold yachts and promising business leads. But taking the recent events within US politics into consideration, could prospective buyers be hesitant to spend money in a country that is uncertain of its future fiscal position?
Bob Denison, who heads US-based broker Denison Yacht Sales, admits that it is a possibility. "It's always tough to say. Obviously politics have the potential to impact things like consumer confidence and the overall mood at any event," Denison speculates, but maintains a positive outlook on the decision; "I know many of us are very grateful the government shutdown is over, that wouldn't have been a fun cloud over the docks in Fort Lauderdale."
In the context of the wider US yachting market, Denison believes that there may be consequences of the governmental decision. "The extension certainly might affect the US yachting market on some level," Denison explains. "But there are dozens of other factors that will impact our industry as well: banks are lending more freely, the stock market is reaching historic highs, real estate is rebounding and unemployment rates are falling. It is also important not to forget the positive impact advancements in the yachting industry as a whole will have on the global market. I truly believe the jumps we're seeing in technology, hull design navigation, propulsion, interior spacing and new safety measures are making yachting more attractive to new markets."

"I know many of us are very grateful the government shutdown is over, that wouldn't have been a fun cloud over the docks in Fort Lauderdale." - Bob Denison

Kevin Merrigan, CEO of Northrop & Johnson, agrees that the US market is continuing to look more and more promising. "We are seeing a shift in the market place; prices are not increasing but there are more buyers,” Merrigan says. “You are getting a true sense of market value.” And Merrigan believes that the figures at Northrop & Johnson reflect this positive state of the market; “Judging from inquiry and sales level, I think the US market is moving forward.”
Carlos Vidueira, executive director of The Marine Industries Association of South Florida, owners of FLIBS, is also not phased by the notion that recent US politics may intervene with the overall success of the show. “We are pleased to report that the resilient American buyer appears to have returned with strength and has been unaffected by the debt ceiling discussions,” Vidueria states. “All of our indications are that the 2013 Fort Lauderdale Boat Show will be one of the best in history.”
Following a blighted start to last year’s show brought about by severe weather problems, all hopes are on a smoother show this year for business. The unfortunate timing of the governments last-minute decision may mean that a few prospective buyers are left cautious of signing deals until the fiscal and political future of the US is more clear. Nonetheless, FLIBS should provide excellent opportunity for prospective buyers to survey what is on offer.
The Superyacht Group will be at FLIBS 2013, please visit us at our stand; Yachting Tent 624 - 625.

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