In December 2006, APPLIANCE magazine published its annual Portrait of the Latin American Appliance Industry, which included actual and appliance forecast sales throughout the Latin American and Caribbean regions.
Many of these appliance markets are seeing strong growth, and very year, more of Latin America's half-billion people become appliance buyers, thanks to retail credit and a Mexican housing boom.
The largest overall market in the region is Brazil, with about 190 million people and well-developed industrial and service sectors that are giving it true economic muscle. Brazil's economy had the fortitude to persevere when it took several economic shocks in the first half of the decade. The economy is carefully managed. Productivity is increasing. Brazil is keeping a firm grip on the reigns of its economy, even as other nations begin to appreciate the market potential it offers. The U.S. is particularly eager to sign a trade agreement with Brazil, and is actively signing free trade agreements with other, economically smaller South American nations, hoping Brazil feels the need to get on-board as well.
Mexico's Growing Housing Market
The non-profit American Chamber of Commerce of Mexico projected the country's gross domestic product (GDP) growth to be 4.2 percent for the year as of July 18, 2006. The full-year GDP was 3.0 percent in 2005 and 4.4 percent in 2004. Inflation in Mexico was 3.3 percent in 2005 and is holding steady at 3.1 percent as of mid-July 2006.
Other economic indicators are also at reasonable levels and remaining steady. Euromonitor's "Domestic Electrical Appliances in Mexico" report characterizes Mexico's economy as, for the first time, stable and progressing.
The number of households in Mexico—an indicator of great importance to the appliance industry—continues to grow at a healthy rate. About 700,000 new households were built in 2005, and the trend will continue as more low-income and middle-income families in Mexico find they can now purchase a home for the first time. The tremendous growth in credit is also spurring more consumer consumption in Mexico, with most big appliance retailers offering credit to lower-income consumers.
The APPLIANCE magazine Portrait of the Latin American Appliance Industry details growth in industry segments in Mexico such as refrigeration appliances, which increased in 2005 to sell 1.9 million units—despite price increases. Laundry appliances sales were as well, by 8.1 percent, to 1.8 million units. Also showing growth: dishwasher and cooking appliances unit sales, as well as small cooking appliances, personal care appliances, and air treatment appliances.
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