Production of electrical domestic appliances in the EU is expected to rise 1.4 percent in 2010, while the outlook for 2011 is more positive, according to the Economic and Steel Market Outlook 2010-2011/Q2 2010 Report from EUROFER's Economic Committee, released by the European Confederation of Iron and Steel Industries (EUROFER).
"The basis for the economic recovery in the EU will broaden owing to a strengthening in private consumption as uncertainty slowly ebbs away. Moreover, activity in the housing sector is likely to become more dynamic, leading to an increase in the sales of new and existing homes. Total EU output could increase by almost four percent in 2011," the EUROFER report reads.
According to EUROFER, this year activity in the electrical domestic appliances industry is expected to expand again, albeit at a very slow rate and from a low level. Consumer confidence had been rising up to the end of last year, but stabilized at a rather depressed level in early 2010, reflecting persistent uncertainty concerning economic prospects, unemployment and the impact of the austerity programs on disposable income. The outlook for private consumption is dull and consequently EUROFER suggests that spending on white goods and domestic appliances will remain sluggish. Most markets in the EU are heavily saturated; the current weakness in the housing market is not helping either.
Meanwhile, competition from third country suppliers of electric domestic equipment is heating up; several large producers in Asia have plans to become a major player in the various market segments in Europe.
The EU energy labeling scheme could have some impact on demand due to the increased consumer awareness of the real energy use of household appliances. To some extent, it could accelerate replacement demand in the EU.
In 2009, total production of electrical domestic appliances in the EU dropped by almost 13 percent compared with the preceding year. In the fourth quarter, the year-on-year reduction in output eased to just over five percent, from a double digit figure earlier in the year.