issue: January 2007 APPLIANCE Magazine
Gas Appliance Manufacturers Association
GAMA’s Forecast for 2007
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by Jack W. Klimp, president, Gas Appliance Manufacturers Association (GAMA)
It is with considerable reluctance that I ever agree to predict the future. I cannot help but remember the lament of the great Russian novelist Leo Tolstoy that there are many predictions of rain in the newspapers, but squeeze those papers as strongly as you can and you will never get a single drop of water out of any of them.
Nevertheless, we may be able to glean some useful insight into our industry in this new year from a few general observations that I feel very comfortable in making.
GAMA’s manufacturers appear to me to be entering 2007 with optimism and the belief that the economy will continue to grow steadily, inflation will remain in check and shipments of appliances will remain stable.
Shipments of heating equipment increased over the last year, and we believe they will continue to do so in 2007. The market for water heaters remains strong as consumers look for more efficient products for their homes. Sales of both boilers and warm air furnaces should remain stable going into 2007. The new home construction market remains an area of concern, as does the strength of the housing market in general.
There are other developments in 2007, moreover, about which I can be even more certain.
GAMA enters this new year with a 5-percent increase in membership over 2006, having added a number of new furnace, boiler, controls, motor and blower, and gas detection equipment manufacturers. We are in the process of actively expanding the Hydronics Institute Division with the addition of commercial and industrial boiler manufacturers, and we are seeking other opportunities to enhance our strategic vision as “the most effective, influential heating equipment and components industry association.”
GAMA’s 2007 objectives include expansion of our advocacy efforts at the
federal and state level, greater participation in standards development
in key world markets and increased industry participation in our
In the new 110th Congress, which convenes this month, GAMA will renew
its campaign for a clarification of federal preemption of state and
local regulations. We remain concerned about the harmful effects both
to manufacturers and to consumers of any weakening of federal
preemption of appliance energy efficiency. GAMA will continue to
oppose efforts to enact state energy efficiency standards, as well as
state petitions to the U.S. Department of Energy (DOE) for a waiver of
federal preemption. We will also monitor closely any proposals dealing
with electronic waste recovery that could be extended inadvertently to
cover our industry’s products.
GAMA also will push Congress for an extension of the tax credits for
the purchase of high efficiency residential heating appliances and
building property that were included in the comprehensive Energy Policy
Act of 2005. These tax credits for high-efficiency furnaces, boilers
and water heaters expire at the end of 2007. To make a meaningful
contribution to our nation’s energy conservation and efficiency
efforts, they must be extended for a longer period of time.
There will be no let-up during 2007 of GAMA’s efforts to ensure that
DOE develops energy efficiency standards for our industry’s products
that are both technically practicable and economically justified. We
support DOE’s proposed rule raising the minimum fuel use efficiency
standard for residential gas furnaces from 78 percent to 80 percent.
However, GAMA strongly opposes DOE’s proposal to raise the minimum
energy efficiency standards for gas-fired boilers from 80 percent to 84
percent. We will continue to push within DOE for a minimum standard of
82 percent for gas boilers, and we
also plan to explore a legislative option to accomplish that objective.
Also, 2007 will see the start of DOE’s rulemaking process for water
heaters, direct heating equipment and pool heaters. That rulemaking
effort is scheduled to begin in January 2007 with GAMA’s full
involvement in the process.
Internationally, GAMA will remain on high alert to developments in
China and Europe regarding restrictions on hazardous substances (RoHS)
or similar, mandated environmental regulations, and our efforts to
participate in or influence standards development in China and Canada
GAMA activities in China on behalf of our industry have reached
critical mass now, and our Beijing office is in regular,
Chinese-initiated contact with commerce, construction and standards
developing agencies there to provide our industry’s input on issues
under consideration. GAMA’s second mission to China for business
development took place in late 2006, with 31 GAMA member-company
representatives holding business discussions with Chinese potential
business contacts and touring space and water heating appliance
factories and testing centers. My expectation for these activities in
2007 is that they will not only continue but will intensify.
So while I may be hesitant to forecast numbers of shipments or consumer
demand or the vagaries of the economy, I feel no compunction in
declaring that the battle plan I’ve outlined for GAMA in 2007 will go a
long way toward keeping our industry strong and profitable.