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issue: January 2007 APPLIANCE Magazine

Outdoor Power Equipment Institute
Cautiously Optimistic

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by William Harley, president and CEO, Outdoor Power Equipment Institute (OPEI)

The two words that describe the outdoor power equipment (OPE) industry are “cautious optimism.”

Of the two major factors that forecast shipments of outdoor power equipment, one (housing sales and starts) is declining and the other (weather) is unpredictable. Still yards, parks, golf courses, and the like need to be maintained and this generally means the use of outdoor power equipment. Recent indications from the Department of Commerce show positive economic growth, lower energy costs, solid job growth, and wage increases. This news, along with the absence of any major weather events (e.g., drought, flood or hurricane) means shipments of outdoor power equipment could very well beat the estimated forecasts. In fact, we have already seen a positive change in the forecasts for shipments in many products over just the last few months.
The Outdoor Power Equipment Institute (OPEI) produces forecast estimates on product shipments from our member companies four times per year. Factors that impact the forecasts include “real-time” data on shipments from OPEI members and various economic indicators. A statistical model prepared by the University of Michigan links the industry data with the national economy.

Forecast Estimates for Hand-Held Products

The hand-held product group (consisting of hand-held and backpack leaf blowers, trimmers and chainsaws) is forecast, for the large part, to hold its own—although 2007 may prove to be a little unsteady. Reported shipments of products in the hand-held category account for approximately 96 percent of the market share. Forecasts of shipments of hand-held products are on a calendar year basis.
The end-of-year 2006 forecast estimates that the shipments of hand-held blowers will decrease by 1.9 percent, backpack blowers will increase by 2.7 percent, trimmers will decrease by 11.0 percent, and chain saws will decrease by 2.3 percent. For hand-held and backpack blowers, this follows a record year for shipments for both products. At the end of calendar year 2005, shipments of backpack leaf blowers increased 23.9 percent while shipments of hand-held leaf blowers increased 10.3 percent.
It is estimated that 2007 shipments will continue to decrease for hand-held blowers (2.7 percent), backpack blowers (6.9 percent) and chainsaws (4.1 percent). However, the current (September 2006) forecast for trimmers is estimated to increase by 1.2 percent although the previous (June 2006) forecast showed that trimmer shipments would decrease by 1.4 percent.
Backpack and hand-held leaf blowers are forecast to rebound in 2008 by 7.5 percent and 5.8 percent, respectively, while the shipments of chainsaws and trimmers are forecast to decrease in 2008 (by 4.0 percent and 1.8 percent, respectively).

Forecast Estimates for Consumer Turf Products

Consumer and commercial turf product shipment forecast estimates are based on a model year of September through August. The shipments included in consumer turf represent 98 percent of the total market share and commercial turf product shipments account for approximately 90 percent of the total market share.
Shipments of walk-behind mowers dropped 6.1 percent in model year (MY) 2006 (September–August). The decrease in shipments is forecast to continue through MY 2007 when estimated shipments are expected to be 2.4 percent lower. A rebound is forecast for MY 2008, when shipments will increase by 2.8 percent.
Shipments of consumer riding mowers are forecast to follow a similar pattern. In MY 2006, shipments of consumer riding mowers decreased 8.6 percent and this downward trend is expected to continue in MY 2007, when shipments are forecast to decrease 3.4 percent. However, in MY 2008, shipments of consumer riding mowers will make up for MY 2007 and a little more, when shipments are estimated to increase by 3.9 percent.

Forecast Estimates for Commercial Turf Products

The commercial turf products are made up of intermediate walkers and riding mowers. In MY 2006, shipments of commercial intermediate walkers decreased 16.2 percent while shipments for riding mowers increased by 1.0 percent. Over the last few months, the forecast for MY 2007 and MY 2008 for intermediate walkers has improved, due to a more positive outlook on the U.S. economy. The forecast for intermediate walkers in MY 2007 still is expected to show a decrease in shipments of 6.2 percent but this is significantly less than the forecast in June, which reflected a decrease in shipments of 13.3 percent. In MY 2008, shipments of these products will increase by 2.6 percent, although the forecast from a few months ago showed an estimated decrease of 6.1 percent.
Shipments of commercial riding mowers increased by 1.0 percent in MY 2006. Forecast estimates for MY 2007 and MY 2008 indicate that shipments will decrease by 3.5 percent in MY 2007 but shipments are expected to rebound in MY 2008 by 4.8 percent.

Overview of OPE Industry

The OPE industry manufacturers about U.S. $9 billion of product annually and employs approximately 30,000 workers. In 2004 and 2005, the industry had an approximate trade surplus of $1 billion. This surplus is a result of exports increasing at a faster rate than imports. In 2005, the industry exported approximately $1.3 billion in products while imports were valued at $701 million. Since 1996, the OPE industry has generated a cumulative surplus of over $4.5 billion. The largest markets for U.S.-manufactured OPE are Canada, followed by France and then Australia. Mexico was the largest supplier to the OPE industry while Canada and China followed in second and third positions.
OPEI is the international trade association that represents manufacturers of outdoor power equipment, component and attachment suppliers, as well as allied services. Founded in 1952, OPEI is committed to advancing the OPE industry in the areas of public safety, environmental responsibility, business development, and advocacy. OPEI’s Web site, www.opei.org contains valuable resources on the OPE industry.


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