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issue: January 2006 APPLIANCE Magazine

54th Annual Appliance Industry Forecasts
GAMA's Forecast for 2006

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by Jack W. Klimp, president, Gas Appliance Manufacturers Association (GAMA)

As GAMAs new president, I am pleased to provide this 2006 forecast for GAMAs industries.

Jack W. Klimp, president, Gas Appliance Manufacturers Association (GAMA)

GAMA represents the manufacturers of appliances, components and related products used in space and water heating, commercial food service and power generation, and our industries have a lot to think about in the coming year.

Despite the devastating storms of 2005 and the rising costs of energy that resulted, there are a number of indicators signaling that the U.S. economy is not just holding its own but it is continuing to grow. In third quarter 2005, gross domestic product rose almost 4.3 percent, the fastest growth rate since first quarter 2004, while October factory activity was stronger than predicted, and orders for new U.S.-made durable goods increased 3.4 percent in October and again, the gain was much larger than expected. Jobless claims in November fell to their lowest level in 7 months.

In GAMA's industries, 2005 shipments of our products are slightly under 2004's figures across the board. With the steady upturn in the U.S. economy, however, GAMA members are enthusiastically gearing up for current and projected increased demand for heating products. In fact, in the case of residential gas and electric water heaters, our members saw a 10.4 percent and 12.6 percent increase, respectively, in September 2005 over the same period in 2004. Commercial gas and electric water heater product lines enjoyed slightly lesser increases.

Of course, our industries' activities aren't measured only with numbers. In late 2005, I led GAMA's first mission to China for business development. The jet lag wore off a while ago, but I must tell you that my enthusiasm for the opportunities I saw there hasn't worn off. If you haven't been to China since the 1980's, the transformation toward a market economy has made China almost unrecognizable.

The 25 representatives from 13 GAMA member companies on our mission met Chinese government officials and manufacturers in Beijing and Guangzhou, visited factories, showrooms and industrial parks, and toured economic development zones that would be the envy of any industrialized western nation. The message we got again and again was: China is ready and eager to do business, and from the reactions of many of the GAMA mission members, so are they.

But in a country as vast and varied as China, the 7 days we allotted ourselves to gauge the country's business environment permitted us only to scratch the surface. There is much more to see and investigate. So, in 2006, GAMA will be leading another business development mission to China, to dig deeper and focus more precisely on the aspects of China that make it such a promising place to do business. And we are not limiting our sights only to China. A number of other countries are being touted as "the next China," and GAMA intends to help its members stay ahead of the curve by looking closely at those countries whose markets, labor forces and production costs make doing business there attractive. The global market is no longer just a catchphrase; now it is reality.

Another GAMA activity in 2006 will be the expansion of the consumer education campaign we launched late last year with the U.S. Consumer Product Safety Commission (CPSC) to inform the public on the need for carbon monoxide (CO) alarms in every home in America.
CO is a colorless, odorless, toxic gas, and consumers may not be aware of all the potential sources for CO in the home. Such sources include an automobile engine running in an attached garage, a portable gasoline-powered generator, a fuel-burning appliance that is installed improperly or connected to a blocked or leaking vent system, a charcoal grill or camp stove used indoors, a fire, or a misused engine-driven tool.

The best way to protect against all potential sources of carbon monoxide is to install a CO alarm in every residence, and to replace the alarm's battery on a regular basis. We recommend that consumers always look for a CO alarm that is listed to either the ANSI UL 2034 or the CSA 6.19 standards, to ensure that the alarm has been tested independently and that it has met the durability and reliability levels required for effective use.

We've already begun working with CPSC and the standards developing organizations as research continues to make CO alarms even more effective, but the simple truth is that CO alarms can save lives now. And in 2006, GAMA is going to work to make that message heard across the land.


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