Housing, Power Equipment Sales Expected to Fall

Outdoor power equipment sales are expected to slip, and that's partly due to the expected decrease in housing starts and existing home sales, according to a new forecast by the Outdoor Power Equipment Institute.

The OPEI Forecast for Outdoor Power Equipment is based on OPEI’s econometric model of the industry. The statistical model links the industry with the national economy. The industry forecast is based on the outlook for the U. S. Economy prepared by the University of Michigan.

Despite strong national retail data for January, and expectations for significant real GDP growth during the first quarter, the prospects for outdoor power equipment will be dampened by the housing contraction that started in the fall. Housing starts, in the University of Michigan’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.

Consumer walk-behind shipments are forecast to fall 3.0 percent to 6.2 million units during the 2006 model year while consumer riders are predicted to decline by 2.0 percent to just under 1.9 million units. Commercial turf care walk-behinds are projected to decline slightly during MY2006, while the commercial riders will only grow 1.1 percent. Commercial products combined will close the year at a level slightly above 242,000 units.