issue: January 2010 APPLIANCE Magazine APPLIANCE Line A Realistic Recovery	Share  Printable format  Email this Article  Search
Tim Somheil, editor  The numbers are finally starting to show an appliance recovery under way.

There was pervasive uncertainty at the end of 2008. No one knew what was coming next. Could the economy be pulled back from the brink? Was the very different approach of the incoming national leadership going to be the right approach to solving these huge problems, or was it too much change, too fast? Contention was already building over how to implement stimulus—and some thought any stimulus package would be a costly mistake.

That’s how it was in late 2008 when APPLIANCE magazine was writing its annual Industry Forecasts for the January 2009 issue.

But there was some consensus about what the future probably held in store. Best case scenario: housing would finally bottom out in 2009, and then begin a long, slow recovery. Congress would pass some sort of stimulus that would nudge housing along and breathe life into consumer spending. Employment would turn around late—simply because employment always lags in an economic recovery.

Whirlpool CEO Jeff Fettig said in late 2008 that he did not expect a turnaround in industry demand until at least mid-year 2009, and he expected major appliance shipments to finish out 2009 down 9–10%.

Those projections, it turns out, were on target. Houses began to sell—decreased prices and a significant tax credit of $8000 made home ownership an affordable reality for many buyers. Major appliance unit shipments, as reported by the Association of Home Appliance Manufacturers (AHAM), showed signs of improvement. An AHAM report showed that the “AHAM 6” category of appliances (washers, dryers, dishwashers, refrigerators, freezers, ranges, and ovens) was up 1.5% in September 2009 compared with September 2008—the first such increase since the month of June 2007.

After a slight drop in October 2009 (–1.7%), November saw the AHAM 6 category register a big single-month increase of 16.3%. The exceptional results from November improved year-to-date shipment numbers, which had been down double-digits, to –9.1%. With only one month left to report, 2009 is actually on target to end as Fettig and others in the industry predicted.

HVAC shipments are also moving in the right direction, and statistics from the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) showed that October 2009 residential furnace shipments were up 8.6% over October 2008. Residential water heaters also squeaked into positive territory at 0.3%.

Unemployment appears to have peaked at 10.2%, never having reached the 10.8% of the less-severe 1982 recession. That’s good news when looking at the big picture of the overall recovery, but scant comfort to the millions of Americans still out of work. Unemployment will continue to undermine the country’s confidence.

The recovery may be here, but it is not going to be easy or quick. Industry cost-cutting continues to be painful. Now the industry is working hard to make the most of the ever-heightening focus on energy efficiency and Smart Grid–enabled appliances. This burgeoning early replacement market for home appliances could help boost sales and restore health of the industry.