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October Major Appliance Shipments Fall 14%

Washington — Unit factory shipments of major appliances fell 13.7 percent in October, as the weak economy and distressed housing market continued to take their toll on white-goods vendors and retailers.

According to the latest shipment report from the Association of Home Appliance Manufacturers (AHAM), cooking and dishwashers were two of month’s hardest-hit categories, both falling 18.3 percent year over year.

The carnage at retail could actually be greater. David MacGregor, an analyst at Longbow Research in Cleveland, believes retail sales were down by the high teens to low twenties in October, based on his monthly survey of dealers.

Some 78 percent of respondents reported declining sales in October, compared with 70 percent in September, MacGregor said. What’s more, none of the dealers reported an increase in sales in October, compared with 16 percent who did so the month before.

He added that the worst may be far from over. Assuming that 50 percent of all majap sales are typically driven by replacement demand, with the other half comprised of discretionary purchases, MacGregor suspects that replacement demand is down 5 percent to 10 percent as consumers postpone new purchases.

That would suggest that discretionary demand is down 30 percent to 35 percent, he argued, and that “as consumer confidence collapses over the weeks ahead, discretionary demand could come down 55 percent to 60 percent.” The implication, he said, is that industry shipments may decline at a rate of as much as 30 percent.

Not all of the news was dreadful. The core laundry category showed signs of recovery, with October shipments falling by a modest 3.4 percent, the AHAM report showed. Also, shipments of upright freezers rocketed 20.6 percent, as more cost-conscious consumers opt to buy food in bulk.

The weakest category in October was room air conditioners, wherein some 13,300 units were shipped back to manufacturers.

The key AHAM 6 sector, comprised of the core washer, dryer, dishwasher, refrigerator, freezer, range and oven categories, fell 8.8 percent in October, AHAM said, and is down 9.3 percent year to date.

Total year-to-date majap shipments are down 8.7 percent to 58.3 million units.