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COWCATCHER MAGAZINE

U.S. model hobby industry estimates show slight growth in revenues over 2011

March 29, 2013

Model Railroading, News

The U.S. model hobby industry, like the economy, is making a slow but meaningful recovery, according to a recent survey of manufacturers and distributors.

The Hobby Manufacturers Association announced today that the industry’s projected sales grew 3 percent in 2012 at $1.31 billion compared to actual sales in 2011 of $1.265 billion. However, revenues reported in HMA’s third U.S. Model Hobby Industry Study lagged the $1.47 billion in 2010 and $1.379 billion in 2009.

“The 2011 actual sales of model hobby products show a 9 percent decrease from the 2009 actual sales reported by survey respondents,” HMA President Fred Hill said in a statement. “This decrease in sales was due in large part to the industry’s later recovery from the economic recession that impacted other industries in 2008 and 2009. Our industry also saw more mergers and consolidations among member manufacturers and an increase in more web-based sellers of hobby products.”

Last year’s sales, however, fared better than the $1.274 billion reported in 2007 prior to the recession and didn’t lose ground on retail estimates. It seems that many enthusiasts are still buying WWII tank kits and model airplane kits and they certainly aren’t going anywhere any time soon. Based on the standard average markup on manufacturer and distributor sales, reported to be 40-50 percent, HMA officials say the estimated size of today’s hobby industry at retail is $2.5-3 billion, the same as it was two years ago.

About 39 percent of HMA’s membership responded to the survey, which was conducted by the University of Louisville School of Business in the fall of 2012.

The study was conducted via an online questionnaire. All data was transmitted anonymously to protect the confidentiality of responding companies. The survey was designed to give the industry valid statistics for business use by HMA members, lending institutions, potential new entrepreneurs and industry retailers.

HMA is the trade association for manufacturers, importers, publishers, producers and suppliers of all model hobby products and related accessories, including model railroading, radio-control and die-cast products.

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Tuned In

Spring is when large-scale model railroaders with their green thumbs plant and prune colorful foliage grown nearly to scale. In some areas, maintaining outdoor layouts is quite challenging because of changing weather. Nancy Norris, an author who builds garden railroads professionally, says some plant varieties have become more difficult to grow in certain Hardiness Zones. In some cases it means garden railroaders having to put more emphasis on growing native plants rather than relying on varieties more susceptible to extreme conditions. She recommends new gardeners consult with their local nurseries for the best choices for an outdoor layout. Norris also has a few recommendations of her own.

Tariffs Cause Concern

Sweeping tariffs imposed on goods imported into the United States are stirring model railroad manufacturers. As a result, model railroading and other hobbies will cost more. In February the U.S. applied a 10 percent tariff on goods imported from China, and the tax has since escalated. Suppliers – including Athearn, InterMountain Railway Co., Broadway Limited, Rapido Trains and ScaleTrains – have been putting dealers and customers on notice that prices will increase tariffs are implemented.

Managing Freight Cars

The first rule of railroading is “expect movement on any track at any time in any direction.”  This may seem like an overabundance of caution, but railroading is a dangerous sport. Always expect a train when you’re around the tracks. The second rule of railroading is that there is an exception to every rule. The North American freight car fleet in 2023 consisted of 2.03 million rail cars, according to Railinc’s Umler Equipment Index. Rail car fleet management — how empty cars get dispatched to move to their next loading point — is an ever-moving process and often requires fleet car managers to be nimble.

Plus

A vintage Lionel store display is always a crowd pleaser, Atlas' N-scale True-Track is the right solution for a new test track on the Whitehurst & Pine Ridge Railroad, The Green Diamond was Illinois Central's gem on the St. Louis-to-Chicago route and more!