2016 Industry Forecasts (Part II)

What will the presidential election and much more mean in 2016?

The following is the last of a two-part series:

Outdoor Power Equipment (OPE) recently surveyed many of the OPE industry’s top executives about the state of the industry heading into 2016. In particular, we asked the following questions:

1) What is new and exciting about your company or organization heading into 2016?

2) What were the OPE industry’s top news stories in 2015, and what will they be in 2016?

3) What are your predictions for the 2016 U.S. presidential race — who will be each party’s nominee, who will be elected the next president, and how will the outcome affect the OPE industry?

4) What will be the OPE industry’s hottest trends in 2016?

5) What is your overall outlook for the OPE industry in 2016?

OPE received the following written responses, in order, Dec. 21, 2015-Jan. 8, 2016:

1602_OPE_FS_IF02_Erik Sides-web
ERIK SIDES
EXECUTIVE DIRECTOR
EQUIPMENT & ENGINE TRAINING COUNCIL (EETC)
(YORK, S.C.)

1) What is new and exciting about your company or organization heading into 2016?

Erik Sides: EETC has recently launched a new accreditation program geared toward high schools and junior high schools. “First Step to Power” is designed to pique the interest of our youth in the small engine and power equipment industry. The program provides a great framework for a course in small engine theory and basic fundamentals. The program requires both classroom sessions and hands-on engine disassembly and reassembly, along with making the proper adjustment and running the engine to ensure it’s functioning properly. Successful completion of an EETC-administered knowledge test results in the student receiving an Apprentice Certification in Small Engine Theory and Fundamentals. The school program can be accredited for either two- or four-cycle engines, or both. This apprentice certification is the “first step” to the power equipment industry and will hopefully provide the industry with a potential pool of future technicians.

2) What were the OPE industry’s top news stories in 2015, and what will they be in 2016?

Erik Sides: Consolidation at the distributor level, introduction of new technologies, the economy, and weather.

3) What are your predictions for the 2016 U.S. presidential race — who will be each party’s nominee, who will be elected the next president, and how will the outcome affect the OPE industry?

Erik Sides: I would say “polarizing” is the word in general no matter where you are politically. I think Hillary will be the Democrats’ nominee, and “at the moment,” it’s between Trump and Cruz for the Republicans’ nominee, with Trump on top for now. I will not speculate on who will win, as a lot can change between now and election time. The outcome of this election, however, will affect the industry and the economy greatly, depending on the administration elected. The new administration will determine how emissions regulations and environmental regulations will impact the industry going forward. I am reminded of a quote from President Ronald Reagan — “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

4) What will be the OPE industry’s hottest trends in 2016?

Erik Sides: I said this a few years back, and I will say it again: “technology” whether it’s on a piece of equipment or a new app that helps a dealer conduct business quicker and more efficiently. Technology is changing and will continue to change how we conduct business and interact with our customers and equipment.

5) What is your overall outlook for the OPE industry in 2016?

Erik Sides: I am optimistic about the outlook for 2016.

1602_OPE_FS_IF03_Harold Redman-web
HAROLD REDMAN
PRESIDENT
TURF AND CONSUMER PRODUCTS
BRIGGS & STRATTON CORP.
(MILWAUKEE, WIS.)

1) What is new and exciting about your company or organization heading into 2016?

Harold Redman: We’ve introduced some of the most exciting new products in the company’s recent history. In the growing residential zero-turn category, the new Snapper 360Z and Simplicity Courier offer commercial-inspired performance and provide the added utility of a versatile cargo bed. Additionally, the Courier offers a patented suspension system and mesh seating for greater operator comfort. Most models offer fabricated mower decks that provide the customer a more durable product, along with a great cut.

We continue to grow our commercial footprint with new commercial turf and lawn care products. In our Ferris brand, we’ve introduced a new soft ride stand-on zero-turn, featuring a patent-pending suspended operator platform and an EFI Vanguard engine option — these machines offer the best in compact maneuverability and productivity. We’ve also introduced a new line of Ferris fleet zero-turns for 2016, which offer solid performance and durability, along with great value.

In the Billy Goat line of specialty turf care products, our hydro aerators and sod cutters are really helping landscapers get the job done easier and have become the standard for productivity.

For 2016, we’ve upgraded the content of our websites to be more interactive for users, and added ratings and reviews for our products. We’ve also changed the mix of our advertising programs between digital and traditional formats to optimize our message to the targeted audience.

2) What were the OPE industry’s top news stories in 2015, and what will they be in 2016?

Harold Redman: For 2015, there were several market and economic factors that impacted OPE manufacturers, dealers and consumers. For marketers that sell portable generators, 2015 was the third year without significant hurricane or ice storm activity, which drive generator sales. Thus, overall category sales have fallen over the years for all industry segments.

The U.S. housing market is still in a slow recovery, likely resulting in slower annual growth in OPE. That said, we’ve experienced fairly normal weather patterns in most regions of the country over the last 2 years, which have resulted in healthy dealer sales growth in categories such as zero-turns and commercial mowers. The decline in the price of gas has also had a positive impact on the bottom line for commercial cutters and landscapers, and of course, creates additional available dollars for consumers to spend on category products and services.

The increased strength of the U.S. dollar versus other world currencies, along with the economic environment in many regions of the world, have made it difficult to sustain export shipments from U.S.-based OPE manufacturers, as well as maintain in-market pricing and profitability.

The record attendance and participation at the GIE+EXPO show in October highlights the optimism by manufacturers and customers for U.S.-based growth opportunities in 2016 and beyond. Most exhibitors stated the GIE+EXPO show was the best ever.

El Nino’s prediction for a warm, wet winter is coming true, and having a negative impact on sales of snowthrowers as of the date this is written. If the trend continues, it’s likely to create cautiousness from dealers heading into the spring, and put pressure on snowthrower manufacturers to make sure dealers aren’t severely cash-flow impacted as the spring season approaches. Hopefully, winter will arrive in time for dealers to sell through their inventory.

3) What are your predictions for the 2016 U.S. presidential race — who will be each party’s nominee, who will be elected the next president, and how will the outcome affect the OPE industry?

Harold Redman: I won’t make any predictions for the presidential race; all I’ll say is that it’s interesting to watch. Of course, as a key industry manufacturer and participant in OPEI, we will watch the race closely to better understand the nominee and party’s position on compliance and regulatory issues that can have an impact on our industry, along with stances on economic policy that can also drive consumer behavior.

4) What will be the OPE industry’s hottest trends in 2016?

Harold Redman: Zero-turns will likely remain as a hot product trend for 2016. The average ride customer is shopping for a new product every 7-8 years, and within that time frame, zero-turns have really gained momentum by appealing to consumers due to their timesaving benefit.

Expansion in digital and social marketing programs offered by manufacturers and dealers in order to optimize their messaging and reach customers through many forms of media. Today’s OPE customer continues to refer to social media and ratings and reviews, in addition to manufacturer’s websites, to evaluate product and service options and make an informed buying decision.

5) What is your overall outlook for the OPE industry in 2016?

Harold Redman: Consumer products will likely see a single-digit increase as housing continues its slow return and the U.S. market continues forward without major interruption. The forecast includes the assumption of normal spring weather. Consumer zero-turns are likely to grow at an accelerated pace versus tractors or other riding products, to which dealers still sell an estimated 50 percent of the category volume.

The forecast for commercial products is mid-single-digit growth, with research suggesting that consumers are continually willing to pay for lawn and landscape services based on the economic environment.

Let’s hope for a warm, wet, early spring.

1602_OPE_FS_IF04_David Withers-web
DAVID WITHERS
PRESIDENT
JACOBSEN, A TEXTRON CO.
(CHARLOTTE, N.C.)

1) What is new and exciting about your company or organization heading into 2016?

David Withers: Just a few months ago, we introduced our all-new Professional Series commercial-grade mowers and utility vehicles. We made a big splash at the GIE+EXPO in Louisville and have seen a lot of interest from commercial cutters, professional turf managers, and OPE dealers who are interested in carrying our line.

Building out our distribution network for these exciting new products will be a top priority for us in 2016. Moving into 2016 and beyond, Jacobsen will leverage our long history in golf to enter new market sectors where our products provide better results for customers and a unique selling proposition for OPE dealers.

As a result, I think we will see the early interest in our Professional Series commercial-grade mowers and utility vehicles translate into many customers and dealers deciding to add these great products to their lineup.

2) What were the OPE industry’s top news stories in 2015, and what will they be in 2016?

David Withers: Obviously, for us the biggest news was Jacobsen entering the zero-turn market. Our expansion was partly a response to the professional turf manager being asked to take on more responsibilities and projects. As a result, they are looking for a wider range of maintenance tools to help them complete a variety of different tasks.

3) What are your predictions for the 2016 U.S. presidential race — who will be each party’s nominee, who will be elected the next president, and how will the outcome affect the OPE industry?

David Withers: As a native Brit who has only been in the states full-time a little more than five years, I’m still learning the political landscape in the States. But regardless of who wins, the ramifications for the OPE industry can’t be overstated. The majority of professionals in our industry run small businesses that are very sensitive to any changes in health insurance, labor, water and environmental regulations, and fuel prices. We hope that the next administration is an advocate for small businesses everywhere, especially in our fast-growing industry.

4) What will be the OPE industry’s hottest trends in 2016?

David Withers: If gas prices continue to fall, we may see more landscape contractors enter the market as the fuel barrier is lowered. I also think consumers will continue to demand easier ways to buy landscaping equipment and services, with contractors and manufacturers expanding their use of web and smartphone technology to connect with these customers. I think we’ll also see maintenance budgets continue to shrink, forcing many to do more with less. As a result, machine productivity and reliability will be a top priority for equipment purchase decision makers in 2016.

5) What is your overall outlook for the OPE industry in 2016?

David Withers: If the optimism and excitement we saw at the GIE+EXPO in October is any indication of the state of the OPE industry, I would say the outlook is overwhelmingly positive. I think a mild winter and early spring would be a great springboard for the year. Good weather, low gas prices and rising consumer spending could combine to make 2016 a very good year for the OPE industry.

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