Optimistic consumers could boost appliance shipments to record levels this year after a small decline in 1997, according to the Association of Home Appliance Manufacturers.
AHAM forecasts major appliance shipments will reach 55.3 million units this year, about 125,000 more than the previous record set in 1996. Shipments slipped about 0.8 percent in 1997, although total value of shipments remained about the same, said John Jiambalvo, executive director of portable appliances.
``Demand is terrific for white goods,'' Jiambalvo noted. Consumers are buying major appliances because incomes are rising and interest rates are low, Jiambalvo said in a telephone interview from AHAM's office in Chicago.
Cooking appliances will be among the fastest-growing this year, rising 1.4 percent to 16.8 million units, AHAM predicts. Laundry appliances should increase 1.3 percent to 12.7 million units. Home-comfort items like air conditioners and dehumidifiers will grow fastest, by 2.3 percent to 5.2 million units. Sales for kitchen cleanup products, such as dishwashers, will rise only about 1 percent, and refrigerator and freezer sales are expected to slip about 0.2 percent, according to AHAM figures.
Although consumer spending was strong in 1997, ``consumers were distracted'' by the growing array of home computers and other electronic products, causing them to spend less on major appliances, Jiambalvo said.
Small-appliance sales, especially for personal-comfort products like hand-based massagers, and for bread makers, are strong.
Major appliance manufacturers are selling lots of product but still find it hard to make a profit, Jiambalvo said. Another AHAM official suggested appliance makers are trying to cut material costs without sacrificing performance.
Refrigerator liners are one area where appliance firms are tackling costs, said Len Swatkowski, AHAM's director of engineering services. The companies might have overdesigned refrigerator liners in the rush to switch to materials that can withstand a new generation of blowing agents for polyurethane insulation, he said. But, after spending millions to switch to new liners, refrigerator makers are attempting to reformulate styrenic resins, obtain cost-effective coextrusions and laminates, and, where possible, downgauge, according to Swatkowski. They also want to recycle all their liner regrind, a difficult task with multimaterial liners.
Custom molders can help appliance makers lower costs, said Chuck Flaherty, general manager for injection molder Jones Plastic & Engineering Corp. of Jeffersontown, Ky.
``Custom molders are experts at what they do,'' he said, and appliance firms often find it cheaper to get molding done outside. Though appliance firms do buy plastics processing equipment, ``more jobs are going out than staying inside'' their plants, Flaherty added.
Ferro Corp.'s Lee Overley, applications manager for filled and reinforced plastics, agreed that appliance majors are not tending to do more of their own molding. Whirlpool Corp. farms out much of its molding but Maytag Corp. and GE Appliances do a lot of their own.
At HPM Corp., press sales to appliance majors ``are not flat and aren't booming,'' said Brian Bishop, injection molding general manager at the Marion, Ohio, firm. ``Some molding has gone inside and [appliance firms] continue to buy equipment,'' he said.