Major Household Appliance Manufacturing in the US Industry Market Research Report Now Available from IBISWorld

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The recovery in the housing market will bode well for appliance manufacturers. Because new homeowners comprise a significant portion of appliance sales, the anticipated rise in housing starts will bring increased demand to the industry. However, appliance manufacturers will continue to face rising input costs, particularly plastic. With financial assistance from federal tax credits expiring, many operators will cope by moving their production to lower labor-cost countries like China or Mexico. For these reasons, industry research firm IBISWorld has updated its report on the Major Household Appliance Manufacturing industry.

IBISWorld Market Research

IBISWorld Market Research

The recovering housing market will increase demand for new appliances

The Major Household Appliance Manufacturing industry felt the pressure in the five years to 2012 due to the effects of the changing real estate market. According to IBISWorld industry analyst Doug Kelly, “Like most producers of household goods, major appliance manufacturers saw demand grow during the real estate surge through 2006 and then watched it decline when the housing market weakened.” When consumers move into new homes, they generally purchase new appliances. Therefore, activity in the residential real estate market directly affects major household appliance manufacturers. As a result of the subprime crisis and housing market collapse, industry revenue has declined at an estimated average annual rate of 6.3% to $15.2 billion in the five years to 2012.

In addition to the unstable real estate market, appliance manufacturers have weathered rising input costs and changing government regulations – particularly, new energy-efficiency standards for some major appliances, including dishwashers and washing machines. “To adapt to these changes,” says Kelly, “firms introduced new products and moved many manufacturing facilities abroad to leverage lower-cost labor.” Profit margins are expected to strengthen as a result of lower production costs, but they will be slightly offset by fewer government tax credits for energy-efficient appliances.

Industry concentration measures the extent to which major players dominate an industry. Concentration in the Major Household Appliance Manufacturing industry is expected to be high, with the top four major players accounting for most of the industry's revenue. Whirlpool dominates the markets with the largest market share. Whirlpool's dominance has come through providing a large range of products at many different price points and by acquiring competitors. Market concentration has been increasing over the past five years. During the economic recession, many firms left the industry because they were unable to weather the rapid revenue decline. Larger players gained market share as the smaller companies exited the industry. From 2012 to 2017, the industry is expected to become less concentrated. As the industry rebounds and new products are introduced to spur growth, new companies will enter the industry.

As disposable income increases and consumers who refrained from purchasing expensive items start spending again in 2012, industry revenue growth is expected to get out of the red and increase 1.1%. In the next five years, the recovering housing market will increase demand for new appliances. The growing popularity of smart appliances will also help boost sales. As a result, industry revenue is projected to grow at a higher average than during the past five years. Major revenue declines forced industry exits in the five years to 2012, but companies are expected to rejoin the industry as it slowly recovers.

For more information, visit IBISWorld’s Major Household Appliance Manufacturing in the US industry report page.

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IBISWorld industry Report Key Topics

This industry includes firms primarily engaged in manufacturing household cooking appliances, laundry equipment, refrigerators, upright and chest freezers, dishwashers, water heaters, garbage disposal units and other electrical and nonelectrical major household appliances. This industry does not include central or room air conditioners.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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