OPEI Releases Forecast for Commercial and Consumer Products

An uncertain economy shows a slight downturn in the shipments of certain consumer and commercial turf products, a forecast by the Outdoor Power Equipment Institute reveals.

The Virginia-based organization bases its study on the outlook of the U.S. economy prepared by the University of Michigan. The industry forecast is based on actual industry shipments data through May 2007.

Consumer confidence is increasingly unsteady as a result of high gasoline prices and a sharp decline in the housing market. After posting a 3.3 percent increase in real output (GDP) in 2006, the U.S. economy is poised to only grow by a tepid 2 percent in 2007. Housing starts contracted by 12.4 percent in 2006, down from 2 million units in 2005. This contraction is expected through 2007 with an expected decrease of 18.3 percent. Following a 7.5 percent drop in sales of existing single family homes in 2006, sales are forecast to decrease another 7.5 percent this year. In addition, gas prices continue to fluctuate and hit their highest prices in the last two years in June.

With the exception of riding garden tractors, shipments of all products are not expected to experience an increase until model year 2008 (September 2007-August 2008). Total model year 2008 walk-behind shipments are expected to increase by 3.9 percent over model year 2007 shipments although walk-behind mower shipments are not expected to start expanding until Q2-2008 (December 2007-February 2008). Front engine lawn tractor unit shipments, which peaked in model year 2004, will continue to slide through model year 2007. Model year 2008 lawn tractor shipments will increase 0.2 percent over model year 2007 (virtually flat), and will remain below 1.4 million units. The decline of garden tractor shipments is forecast to continue through model year 2008, closing with only approximately only 69,450 units shipped for the year.

Intermediate commercial turf walker shipments for model year 2007 are predicted to decline by 5.5 percent, falling below 30,000 units for the year, and will only total about 30,240 units for model year 2008. During model year 2007, commercial turf rider shipments are forecast to fall below 200,000 units. Model year 2008 commercial riders are forecast to recover with a 5.9 percent upsurge.