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The Subprime Mortgage-Barbeque Connection
June 12, 2012
“The subprime mortgage crisis acted as a flame retardant for the ‘Barbeque and Outdoor Cooking Stores industry,’” a new report by IBISWorld Market Research said. However, the outlook for both sectors is improving, according to mortgage and barbeque industry analysts.
“Despite its high level of delinquencies, the subprime sector has seen several positive performance trends over the past year,” Peter McNally, a vice president and senior analyst at Moody’s Investors Service, wrote this week. The rating service is considering upgrading 724 tranches of subprime mortgage-backed securities.
McNally said the delinquency level on mortgages in subprime MBS is 46 percent, down 18 percent from peak levels – the largest rate of decline among non-agency MBS types. And because so many of the sector’s weaker borrowers are already delinquent or have defaulted, he said there is a relatively low potential for significant future performance deterioration.
The poor performance of subprime borrowers in recent years has also apparently impacted the barbeque industry. “Consumers were more likely to use the equipment they already had or buy secondhand items,” IBISWorld said.
Agata Kaczanowska, an analyst at IBISWorld, said the barbeque market is improving along with the subprime sector.
“As meat consumption and disposable income increase in the near term, revenue is expected to rebound in 2012,” he said. “Equipment that the industry sells is susceptible to wear and tear, so consumers are expected to finally make the industry purchases they delayed as the recovery takes hold.”
Comments (1)
Who knew;)
Posted by: Mary Lou P | June 12, 2012 9:14 AM Report this comment