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issue: January 2009 APPLIANCE Magazine

Forecast: North America
Expanded Web Coverage: Outdoor Power Declines


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by Diane Ritchey, News Editor

The outdoor appliance industry experienced a rough year in 2008.



Many outdoor appliance companies reported declining sales and plant closures, including Deere & Company, which closed its manufacturing facility in Welland, Ontario, Canada, and transferred production to company operations in Wisconsin and Mexico.

The Tecumseh engine plant in Dunlap, TN, U.S. began closing down December and will be closed completely in April 2009. The plant had produced small engines for companies such as MTD, Toro, and Lawn-Boy, and other lines that made engines for snow blowers and electric generators.

In late December, the Toro Company reported a nearly 100% drop in its fiscal 4Q profit. It reported net income of $13,000 for the quarter ended Oct. 31, compared with $6.5 million, or 16 cents a share, in the year-earlier period. John Wright, director of investor relations, said a voluntary retirement program was put in place in the fourth quarter.

Black & Decker Corp. reported an 18% drop in 3Q 2008 earnings amid a slowdown in sales, and gave a weak outlook for the fourth quarter. Nolan Archibald, the company’s chief executive, said the third quarter was “very difficult,” but sales met expectations despite weaker demand in the U.S. and Western Europe.

Earlier in 2008, the Outdoor Power Equipment Institute (OPEI), said that the forecast for shipments for commercial turf and consumer wheeled (e.g., walk-behind and riding mowers) and hand-held (e.g., leaf blowers, chain saws, trimmers) products would be soft through most of 2008. “The anticipated stimulus package and further movement by the Federal Reserve may serve to strengthen the U.S. economy and alter the current forecast,” OPEI said. “The OPE industry has also been bolstered by the heavy snows in many parts of the U.S. which is forecast to help alleviate drought conditions in some places. A warm spring with adequate rain, especially in the drought-stricken southeast, would result in an increase in shipments of outdoor power equipment.”

For MY 2008 (September 2007-August 2008), OPEI estimated that almost all commercial turf and consumer products will experience a decline in shipments except shipments of commercial riding mowers, which are estimated to remain flat. Consumer zero turn rider shipments are forecast to recover with an estimated 3.5% increase in shipments during MY 2009.

During CY 2008 (January –December 2008), OPEI said that shipments of hand-held blowers and chainsaws will continue to experience a decrease in shipments, but at a smaller rate than during CY 2007. Shipments of backpack blowers and trimmers are predicted to decrease during CY2008 but the decrease will be less than CY2006.

Read our greatly expanded online coverage: North America Appliance Industry Forecasts for 2009:

 

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