Household Appliance Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 280 household appliance manufacturers in the US produce both major appliances and small electrical appliances for home use by consumers. In the major appliance category, primary products include cooking equipment (stoves, ovens, ranges), laundry equipment, refrigerators, freezers, dishwashers, and water heaters. Small electrical appliances encompass a wide range of products, including can openers, food preparation equipment, fans, hair dryers, and vacuum cleaners.

Dependence on Construction Activity

New residential construction and people moving from one house to another drive demand for household appliances.

Demand for Connected Appliances

Manufacturers are responding to rising consumer interest in appliances that feature internet connectivity, or smart appliances.

Industry size & Structure

The average US household appliance manufacturer operates out of a single location, employs about 250 workers, and generates revenue of about $100 million annually.

    • The US household appliance manufacturing industry consists of about 280 companies that employ about 70,000 workers and generate about $28 billion annually.
    • The industry is highly concentrated; the top 20 companies account for about 93% of industry revenue.
    • Major companies include Bosch, Electrolux, Haier, LG, Samsung, and Whirlpool. Of these, only Whirlpool is headquartered in the US, but all have US manufacturing facilities. Whirlpool, in turn, has substantial operations outside the US. Supply chains for household appliances typically span multiple countries.
    • The major household appliance manufacturing segment accounts for 84% of industry revenue and 82% of industry employment.
                                    Industry Forecast
                                    Household Appliance Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Jan 22, 2024 - Wage Growth Outstrips Pricing
                                    • Producer prices for household appliances increased slightly in Q4, but price growth was mostly flat in 2023. However, moderate industry wage growth in Q4 was nearly double the rate of pricing growth. If appliance manufacturers can’t raise prices while wages are increasing, margins may suffer. Appliance manufacturer employment increased moderately in Q4 year-over-year.
                                    • Home remodeling spending is expected to weaken in 2024 but may hit bottom near the end of the year, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to decrease by 1.2% to $464 billion in the first quarter of 2024 compared to Q1 2023. In the second quarter of 2024, remodeling spending will drop to $454 billion, down 6.3% from Q2 2023. Spending will then decline to $452 billion in Q3 2024, down 7.8% from Q3 2023. However, in the fourth quarter of 2024, year-over-year spending is forecast to drop 6.5% to $450 billion. The Joint Center expects that by the end of the year, improvements in homebuilding activity and lower interest rates may help slow the steady decline in remodeling spending. Kitchen remodels are a key demand driver for new appliance purchases.
                                    • Because the housing market is such a crucial segment of the US economy, its current weakness can be a drag on adjacent industries, including home improvement, according to The New York Times. In November, existing home sales declined by 7% compared to a year earlier but were up 0.8% month-over-month – the first such rise in five months, according to the National Association of Realtors (NAR). High home prices and interest rates have reduced home sales, and homeowners with a low mortgage rate are reluctant to sell. About 80% of homeowners with a mortgage have a rate under 5%, and a quarter of homeowners have a rate under 3%, according to Redfin. Historically, homeowners who can’t afford to upgrade to a new home opt to renovate, but many consumers postponed improvements in 2023 because financing them was too expensive.
                                    • Home builder confidence improved in December amid moderating mortgage rates that remained well below 7%, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose seven points to 44 in December 2022, which marked the second consecutive month of strengthening confidence. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The NAHB said that while lower interest rates have improved affordability and drawn more buyers back to the market, 2024 could bring supply-side headwinds, including shortages of workers, materials, and available lots.
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