SIGNIFICANT GROWTH WAITS UNTIL MODEL YEAR 2006

The Outdoor Power Equipment Institute (OPEI) Economic Forecast predicts that significant growth will have to wait until Model Year (MY) 2006. The 2005 MY forecast for consumer product shipments will be about even with 2004 MY results — averaging small growth in all consumer products combined. The OPEI's Econometric Model forecasts a 2.1 percent uptick in consumer walk-behind powered mower shipments for the 2005 MY (September 2004 — August 2005). For the same period, shipments of consumer riders are forecast to dip by a modest 0.3 percent, while tillers are predicted to improve by 2.9 percent.

Factors to explain the expected slow period for consumer products in 2005 include a huge federal budget deficit, $50-plus for a barrel of oil, a gradual increase in interest rates and an expected slow down in the new and existing home markets.

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Consumer demand will firm up by the end of this year and continue in 2006, when the OPEI forecast will be characterized by positive shipments growth for consumer products. With significant growth expected in disposable income during 2006, walk-behind shipments growth is forecast to be 5.1 percent during the 2006 MY, and consumer riders are expected to increase by 6.7 percent.

Commercial turf care intermediate walk-behind units are forecast to increase by 2.9 percent for the 2005 MY, and then accelerate in 2006 with a 6.5-percent increase. Shipments of commercial riders are predicted to outperform the overall industry and grow by 13 percent for 2005 MY, and expand by another 19.7 percent the following year. Over the past 10 years, this has been the most dynamic product category in the entire industry.

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