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issue: January 2009 APPLIANCE Magazine

Forecast: North America
Expanded Web Coverage: Canada's Appliance Slowdown

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by Diane Ritchey, News Editor

Canada’s economy is predicted to shrink for three straight quarters.

Canada’s economy will shrink for three straight quarters as the global crisis hit domestic spending, according to OECD, which said in December that the country’s economy was in a recession. OECD predicted GDP would shrink 1.6% in 4Q 2008, 1.4% in 1Q 2009, and 0.3% in 2Q 2009, before returning to growth. The economy will contract 0.5% in 2009, it estimated. “Excess capacity and lower commodity prices are alleviating inflation pressures, allowing the Bank of Canada to boost its expansionary stance,” it said.

Domestic demand slowed to 2.8% growth in the first half of this year. That is almost half the rate of the past few years. “Indicators point to further weakening in the last half of 2008 as a recession takes hold,” OECD said. As a result, there will be a net loss of jobs in 2009 and the unemployment rate will rise to 7%, the highest since February 2005. The OECD sees the jobless rate peaking at 7.5% in 2010.

The Heating, Refrigeration, and Air-Conditioning Institute of Canada (HRAI) projected that HVAC shipments will decrease this year. HRAI said that shipments of commercial air-conditioning will decrease by 2%, residential air-conditioning will also decrease by 5%, while residential furnace shipments will decrease by 6% over the projected 2008 figures.

However, the Canadian Appliance Manufacturers Association (CAMA), an Electro-Federation Canada (EFC) council, forecast a growth of approximately 3.0% for the five core appliance products over the 2009-2010 forecast period, with some growth in the retail channel, but a negative forecast in the builder channel as housing construction activity eases off. (The five core appliance groups are dishwashers, gas and electric dryers, automatic washers, gas and electric ranges, and refrigerators).

“This past year was an encouraging one for the major appliance industry,” said Larry Moore, vice president, CAMA. All products experienced unit volume increases, with the five core white goods products increasing by 5.3% over 2006. Dishwashers experienced the strongest growth, with increases of 11.5% over the previous year. The retail channel was up by 6.1% on the five core products, while the builder channel slowed down, posting a slight decrease of -0.2%.

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


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