The motorized recreational vehicle (RV) and non-motorized, or "towable," RV market, hindered by a slow economy, is expected to pick up speed over the next five years, growing five percent and reaching $15.9 billion, according to Recreational Vehicle Manufacturing in the U.S., a new report from market research publisher SBI.

Trailing the three percent spike brought on in late 2005 and into 2006 by FEMA purchases for Hurricane Katrina victims, 2006 ended flat with a less than one percent loss, closing the year at $12.3 billion. Higher interest rates, higher gas prices, and a slower housing market are expected to continue restricting consumers' RV purchases through 2007, dropping the market nearly four percent to under $12 billion.

Barring any major hiccups in the economy or any other unforeseen events, however, SBI projects that the market will absorb excess RV units from Hurricane Katrina by 2008, and growth of eight to ten percent will resume during the next three years, topping the market out at 431,000 units and $15.9 billion by 2011. Nevertheless, even marginal rises in interest rates could cause severe pain for consumers. RVs purchases, which can cost in excess of $100,000, are often treated as second homes. Interest can be deducted, somewhat offsetting the impact of rising rates, but not completely.

"The real health of the industry is directly affected by consumer confidence, interest rates, and the cost of fuel," notes Tatjana Meerman, Publisher of SBI. "A strong economy is the industry's best friend. When interest rates rise, RV purchases decline."