Housing market hurting business

Outdoor Power Equipment, August, 2006 by Steve Noe

Despite strong national retail data for January 2006 and expectations for significant real GDP growth during this year's first quarter, the prospects for outdoor power equipment will be dampened by the housing contraction that started in the fall 2005, according the Outdoor Power Equipment Institute's (OPEI) industry forecast (see charts below). The forecast is based on the University of Michigan's (U-M) outlook on the U.S. economy.

Housing starts, according to U-M's latest forecast. will decline by 14.4 percent from 2005 to 2007, while sales of existing single-family homes will slip by 11.2 percent over that period.

During the 2006 model year, which covers September 2005-August 2006, consumer walk-behind shipments are forecast to fall 3 percent to 6.2 million units, while consumer riders are predicted to decline by 2 percent to slightly less than 1.9 million units. Commercial turf-care walk-behind mowers are projected to decline by .8 percent, while the commercial riders will only grow 1.1 percent. Commercial products combined will close the year at a level slightly more than 242,000 units.

As for gasoline-powered handheld products, handheld blower unit shipments are expected to fall 4.3 percent but remain above 2 million units. Shipments of backpack blowers will dip 3.9 percent to slightly more than 550,000 units. Trimmer shipments are expected to drop 4.1 percent but stay above 6 million units. Chain saw unit shipments are also predicted to plummet 6.3 percent.

Steve Noe brings you the following words of wisdom, comments, news items, quotes and other assorted stuff. OPE welcomes letters and comments from its readers. Please e-mail them to Noe at snoe@m2media360.com.

OUTDOOR POWER EQUIPMENT FORECAST

ANNUAL UNIT SHIPMENT GROWTH

                                                        FORECAST
                    MY2002   MY2003   MY2004   MY2005     MY2006

CONSUMER PRODUCTS
WALK-BEHIND
POWERED MOWERS        5.2%     3.6%     6.3%    -1.8%      -3.0%

ALL RIDING UNITS      6.1%    11.1%    10.6%    -4.4%      -2.0%

COMMERCIAL TURF
  CARE PRODUCTS
INTERMEDIATE WALKERS -9.7%    -9.2%    12.0%   -15.3%      -0.8%

RIDING MOWERS         1.6%    25.3%    38.9%     0.1%       1.1%

                    Model year is September-August

OUTDOOR POWER EQUIPMENT FORECAST

ANNUAL UNIT SHIPMENT GROWTH

                                                        FORECAST
                    MY2002   MY2003   MY2004   MY2005     MY2006

HAND-HELD GASOLINE POWERED

HAND-HELD BLOWERS     5.5%     8.3%     0.5%    10.3%      -4.3%
BACKPACK BLOWERS     10.5%    11.3%     6.9%    23.9%      -3.9%
TRIMMERS             13.2%    12.7%     0.2%     3.9%
CHAIN SAWS           15.4%     5.4%    12.1%     1.2%

                    Model year is September-August