Major Household Appliance Manufacturing in Canada Industry Market Research Report from IBISWorld Has Been Updated
New York, NY (PRWEB) April 11, 2014 -- The past five years have seen the rapid decline of the Major Household Appliance Manufacturing industry. Coupled with weak underlying domestic demand from a recovering housing market and muted disposable income growth, the appreciation of the Canadian dollar caused many of the industry's multinational firms to relocate production abroad. As a result, industry revenue declined precipitously, falling at an annualized 15.4% to $606.4 million in the five years to 2014.
“While a poor economic climate produced weak demand for household appliances, the appreciation of the Canadian dollar over the period proved disastrous for the industry's manufacturers,” according to IBISWorld Industry Analyst Dmitry Diment. In the five years to 2014, the Canadian-dollar effective exchange rate, which measures the value of the dollar relative to currencies used by Canada's main trading partners, is expected to rise at an annualized 0.9%. As a result, household appliances manufactured in Canada became more expensive relative to those manufactured abroad. Because a significant portion of household appliances manufactured in Canada are intended for the United States, the industry's largest export market, many of the industry's largest manufactures decamped for the country. In 2010, the industry's largest firm, Electrolux, announced that it would cease production at its cooking appliances factory by 2013. In 2012, Mabe announced that it would close its dryer manufacturing plant and relocate production to the United States and Mexico by the end of 2014. Finally, in 2013, AO Smith announced that it would close its water heater manufacturing plant, completely discontinuing production within a matter of months. These closures proved insurmountable for the industry, as revenue plummeted an astounding 18.9% in 2013, with a decline of 35.3% expected in 2014.
Although rising consumer demand is expected to keep the industry's remaining manufacturers afloat over the next five years, the sustained appreciation of the dollar will lead to greater import penetration and declining export sales. As rising input prices further reduce the industry's already low profit margins, a small number of surviving manufacturers will compete for niche markets in an increasingly fragmented industry. “With the complete exit of Mabe at the conclusion of 2014, industry revenue will continue to plummet,” says Diment. IBISWorld forecasts that industry revenue will decline during the five years to 2019.
For more information, visit IBISWorld’s Major Household Appliance Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry includes firms that manufacture major household cooking appliances, refrigerators, freezers, household laundry equipment and other major electrical and nonelectrical household appliances such as dishwashers, garbage disposal units, water heaters and trash compactors. Small cooking appliances (e.g. hot plates), fans, vacuums, and electric irons are not included in this industry, as are central or room air conditioners.
Industry Performance
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Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
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Market Share Concentration
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Cost Structure Benchmarks
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Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
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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 and Canadian 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.
Gavin Smith, IBISWorld 2, +1 (310) 866-5042, [email protected]
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