A gun-buying boom in the United States, prompted by worries that the new administration might move to restrict firearms purchases, could be coming to an end.
There has been a surge in firearm sales since Barack Obama was elected last fall, apparently buoyed by fears that the new President's administration would launch restrictive gun laws - unthinkable to millions of citizens in a country whose Constitution preserves the right to bear arms.
The two publicly traded U.S. gun manufacturers have been basking in this blossoming market, reporting huge revenue and profit increases despite the recession.
Smith & Wesson Holding Corp. saw its profit more than double to $7.4-million (U.S.) in the quarter ended April 30, while Sturm Ruger & Co. Inc. reported that its first-quarter profit more than tripled from the year-earlier period to $5.8-million.
While several factors contributed to the glowing results, Sturm Ruger chief executive officer Michael Fifer told shareholders in a letter that "a substantial portion of the current demand appears to be based on two concerns: that the change in Federal administrations might lead to a so-called assault weapons ban, and general concerns over personal security and property protection as the economy worsens."
The boom in gun sales is a result of "clever marketing and divisive political rhetoric by the gun lobby in the United States," said Peter Hamm, communications director of the Brady Campaign to Prevent Gun Violence, a gun-control lobby group in Washington.
The National Rifle Association spent millions of dollars on a media campaign suggesting Mr. Obama's administration would diminish individuals' gun rights when he took power, Mr. Hamm said. The key concerns from the gun lobby were a possible ban on assault weapons and tightened ownership rules for other firearms.
"The faithful on the gun-rights side do respond to the rhetoric that they hear from the gun lobby," Mr. Hamm said.
Despite the sales boom, however, both Sturm Ruger and Smith & Wesson have warned shareholders that the surge may be softening.
Smith & Wesson CEO Michael Golden told analysts on a conference call last week that the company is seeing "a general calming of the market."
The key leading indicator for gun sales is activity on the FBI's National Instant Criminal Background Check System (NICS), which allows gun dealers to phone in and determine if a prospective customer is allowed to buy firearms.
Its numbers have ramped up sharply since November. But Mr. Golden said April's NICS volume, which grew 30 per cent year-over-year, was followed by a much more modest increase of 15 per cent in May.
"Dealers pretty consistently tell you that they think the frenzy of buying that was going on in December and January [is softening]" Mr. Golden said. "They'll tell you that sales are still good, but it's not the frenzy that it was before."
One reason for that slowdown, he said, is that there has been a nationwide shortage of ammunition, which has discouraged gun purchases, particularly among first-time buyers.
Sturm Ruger's Mr. Fifer noted that the last time there was a boom in gun sales, just before a federal ban on assault weapons in 1994, the spike was quickly followed by a period where "demand declined significantly and quickly." The assault weapon ban was lifted in 2004.
Mr. Hamm, of the Brady Campaign, believes the gun-buying frenzy is going bust because "the market wore out." The people who were going to acquire more guns because of the NRA rhetoric have now bought them, he said.
At the same time, there has been no move by the new Democratic government to tighten gun control, Mr. Hamm said. "Anybody who thinks that the Obama administration is going to take away the gun rights of law-abiding citizens is paranoid."
Still, the lack of any action from Washington on the gun issue is a disappointment to his organization. While he understands the government has other priorities right now, "we're certainly not satisfied with the attention [gun control]has received," Mr. Hamm said.
"This mythological sense that suddenly you're not going to be able to have firearms for self-defence or for hunting continues to be somewhat pervasive in the United States," he said. "[But]we make glacial progress on toughening gun laws in this country."Report Typo/Error