Moderate Growth Forecast For Upcoming Model Year
Following uneven growth for some products during the current model year (September 2003-August 2004), the Outdoor Power Equipment Instituteís (OPEI) Econometric Forecast Model for consumer and commercial turf products, revised in July 2004, forecasts moderate growth during the 2005 model year.
In 2004, an expansionary monetary policy continues to accommodate and even stimulate growth. New job growth will also bolster consumer confidence and consumption. OPEIís forecast assumes a 4.6 percent jump in real Gross Domestic Products (GDP) for 2004, and continued growth through 2005 with a 4.1 expansion. This growth in GDP for 2004 is the largest seen in the past 10 years. The Federal Reserve will continue to try to regulate inflation by gradually increasing interest rates over the next 18 months.
However, the housing sector, including new housing starts and existing single family home sales, will turn negative during the second half of 2004. For next year, housing activity is expected to contract below the 2004 level.
Walk-behind power mower shipments exploded during the first half of MY 2004 (September 2003-February 2004) and have remained strong over the past four months. Walk-behind shipments are forecast to increase by 7.5 percent for MY 2004. Continued positive but slower growth is expected during MY 2005.
Shipments of all consumer riders combined (rear engines, lawn tractors and garden tractors) also accelerated during September through February, and this trend has continued this year. Shipments are expected to finish the model year ahead of the MY 2003 level. For MY 2005, the forecast calls for reduced growth of 1.7 percent of all consumer riders, compared with the current model year.
Two good years are forecast for commercial turf intermediate walkers increasing in both MY 2004 and 2005. Commercial turf riding mowers will rise in MY 2004 nearing a 30 percent gain and will soar again in MY 2005 with another double digit increase, achieving a significant milestone for this product in number of units shipped. Recently much of the growth in the commercial turf riding mower category has been in zero-turn radius products and that is expected to continue over the next few years.
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