Sales Boom Has Gun and Ammo Makers at Full Capacity

The big news in the firearms, ammo, and accessories business continues to be the sales boom following on the heels of last November’s election of an anti-gun president and a gun-control-friendly Congress. While sales have slowed a bit since last spring’which is normal in the summer months’s ales are up sharply over on a month-by-month basis over last year. In the most recent quarter, Smith & Wesson Holding Corp. reported a 45-percent increase in handgun sales over the same period in 2008.

Sturm, Ruger & Co. reported a quadrupling of net income over the same period last year. And sales are brisk at the smaller, privately held manufacturers that comprise the bulk of the industry, with backorders and waiting lists being common. Data released by the FBI’s National Instant Criminal Background Check System (NICS) reported 1,023,102 checks in May 2009. This figure represents a 15.4-percent increase from the 886,183 checks reported in May 2008.

As you know, FBI background checks are required under federal law for all individuals purchasing either newly manufactured or used firearms from federally licensed retailers. These background checks serve as a gauge of actual sales, but don’t reflect the actual number of firearms sold.

The May increase follows a 30.3-percent increase in April, a 29.2percent gain in March, and increases of 23 percent in February, 28 percent in January, 24 percent in December, and 42 percent in November when a record 1,529,635 background checks were performed. The increase coincides with an increase in excise taxes reported by firearms and ammunition manufacturers, which is another key economic indicator for the firearms industry.

The total number of background checks reported since the beginning of NICS is now over 102,000,000. My guess is, with the focus on the economy, the health-care system, the war on terror, and the growing threat of a nuclear-armed Iran and North Korea, it’s likely to be some time before the president turns his attention to gun-control. And by that time, he’ll have to be thinking about reelection. Thus, I think we can count on continued record sales and no new legislation for the time being. Knock on wood.

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