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2017 Industry Forecasts (Part II)

Expert prognostication beyond the inauguration

Following is the last of a two-part series:

Outdoor Power Equipment (OPE) recently invited several of the OPE industry’s most well-respected leaders to share their thoughts about the state of the industry heading into 2017. Specifically, we asked them the following questions:

  1. What is new with your company and/or any OPE industry associations that you represent?
  2. How will the election of Republican Donald Trump as president, along with Republicans maintaining control of Congress in both the House and Senate, impact the OPE industry?
  3. What was the OPE industry’s biggest story in 2016, and what do you predict it will be in 2017?
  4. What will be the OPE industry’s hottest trends in 2017?
  5. What is your overall outlook for the OPE industry in 2017?

OPE received the following written responses, in order, Dec. 15-19, 2016:

Walker
BOB WALKER
PRESIDENT
WALKER MFG. CO.
(FORT COLLINS, COLO.)

1) What is new with your company and/or any OPE industry associations that you represent?

Bob Walker (BW): We are introducing two new non-collection tractor models for 2017, the H38i and H24d. These are compact tractors with powerful gas (38-hp.) or diesel (24-hp.) engines and coupled with our 64-inch rear-discharge deck, they perform in high-production mowing applications. Our sales programs provide incentives for on-the-property product demonstrations, and our factory sales training for dealer sales representatives will continue after training 529 representatives over the last four years. Marketing is offering a dealer showroom enhancement program that was introduced in 2016 and will be expanded in 2017, claiming “Walker space” in dealerships.

2) How will the election of Republican Donald Trump as president, along with Republicans maintaining control of Congress in both the House and Senate, impact the OPE industry?

BW: In a word, we believe much-needed “change” will come, and that will be positive changes for the OPE industry. Positive changes expected are repealing/replacing Obamacare, reducing regulations/reporting, and reducing taxes. We believe President Trump’s business experience will create a pro-business climate in the country that will greatly increase investment in business and expanded opportunities for U.S. businesses and their employees.

3) What was the OPE industry’s biggest story in 2016, and what do you predict it will be in 2017?

BW: The biggest 2016 story for the OPE industry is the election of Donald Trump. We think the biggest story for 2017 will be the positive changes that come with the new federal government leadership.

4) What will be the OPE industry’s hottest trends in 2017?

BW: Continuing industry consolidation by mergers and acquisitions among manufacturers, distributors and dealers.

5) What is your overall outlook for the OPE industry in 2017?

BW: We think the industry will do well in 2017, and while there may not be a boom in the business, a good amount of growth should occur.

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

1) What is new with your company and/or any OPE industry associations that you represent?

Erik Sides (ES): EETC has had tremendous growth and support from the industry; we were able to add staff to help grow our education initiatives, and we have started producing short, tech training videos. We plan to launch e-learning training programs in 2017 that will enable students and technicians to learn and improve their technical skills.

2) How will the election of Republican Donald Trump as president, along with Republicans maintaining control of Congress in both the House and Senate, impact the OPE industry?

ES: I hope it will mean less regulations and taxes. If the Trump administration, along with the House and Senate, can reduce the amount of regulations that impact business, this could lead to increased capital investment, jobs and hopefully bottom-line profit. If the middle-class consumer had more disposable income, this would lead to economic growth, but a reduction in taxes alone will not be enough. The rise in health care premiums, along with higher deductibles, the last few years has put a major strain on middle-class families, so health care reform is also needed to increase disposable income.

3) What was the OPE industry’s biggest story in 2016, and what do you predict it will be in 2017?

ES: Ninety-six percent of respondents of the OPE 2016 Dealer Survey state there is a shortage of qualified technicians. I think this will be one of the top stories for 2017 and beyond, and the industry and educator members of the EETC are committed to help address this shortage. There also appears to be a need for competitive pay to recruit and sustain the OPE technician force, as 47 percent of the respondents indicate the starting pay for a new service technician is below $13 an hour and 20 percent of respondents pay below $15 an hour for their best service technicians. We have to ensure that the pay scale reflects that of the skill-set we are requiring of the technician.

4) What will be the OPE industry’s hottest trends in 2017?

ES: Technology will be the hot trend; everything from autonomous equipment to equipment that communicates via Bluetooth/cellular signal directly to the manufacturer and/or owner for service reminders, software updates or error/fault reporting.

5) What is your overall outlook for the OPE industry in 2017?

ES: My overall outlook is very positive, and I foresee continued growth in 2017 for the OPE industry.

Melka
BRIAN MELKA
PRESIDENT
KOHLER ENGINES
(KOHLER, WIS.)

1) What is new with your company and/or any OPE industry associations that you represent?

Brian Melka (BM): We continue to launch new products that are driven by the needs of our customers and what they’re telling us. We recently launched a safer, low-emission engine for the portable generator market; a turbo-diesel engine for UTVs in intense military applications; and an advanced EFI system for our water-cooled Aegis engine that delivers more power, lower fuel consumption, and easier serviceability.

We also continue to look for ways to bring commercial performance to the consumer market with the launch of our 7500 EFI and 7000 PRO series consumer twin engines. The same technology and performance found on our Command PRO series of commercial engines is now available on our consumer models.

2) How will the election of Republican Donald Trump as president, along with Republicans maintaining control of Congress in both the House and Senate, impact the OPE industry?

BM: It’s much too early to know how the incoming administration will impact the OPE industry. But, in a general sense, we’re optimistic due to some promising trends that pre-dated the election, including ever-increasing demand for EFI-based products, where startability, performance, ease of operation, and lower operating costs are important. Even with lower fuel costs, users are valuing EFI more than ever for its ability to enhance productivity. There has also been growing strength in residential and commercial construction, which has really benefited our customers in diesel-based construction equipment businesses.

3) What was the OPE industry’s biggest story in 2016, and what do you predict it will be in 2017?

BM: Similar to previous years, the weather dominated many conversations in 2016. This year’s pattern helped the OPE industry to get off to a fast start. But, then cooler northern temperatures moved in and slowed the market over the summer months. Fortunately, a warmer fall season helped to carry the industry into a stronger year-end, and we’re eager to keep the positive momentum going.

4) What will be the OPE industry’s hottest trends in 2017?

BM: We anticipate continued growth in the UTV and ZTR segments, and we’re well positioned to meet this increased demand. Kohler now offers a wide variety of gas and diesel engines designed to help enhance reliability, durability and overall performance in UTV applications.

When it comes to ZTRs, we have several ideal solutions for both commercial and consumer users. For commercial cutters, our popular Command PRO EFI lineup continues to deliver lower operating costs, reduced downtime, and impressive fuel savings. Consumers can also now benefit from our EFI technology following the 2016 introduction of our 7500 Series EFI engine — the very first Kohler twin-cylinder EFI model designed specifically for consumer lawn mowers.

5) What is your overall outlook for the OPE industry in 2017?

BM: ZTR mowers continue to be a popular option for today’s homeowners, so we anticipate some expansion in that segment. But, the steadiest growth will come from the commercial segment as the large and affluent “baby boom” generation ages and turns more and more to professional lawn services.

Purdy
STEVEN D. PURDY
PRESIDENT
OUTDOOR POWER EQUIPMENT AND ENGINE SERVICE ASSOCIATION (OPEESA)
(ESSEX, CONN.) &
PRESIDENT
OSCAR WILSON ENGINES & PARTS, INC.
(O’FALLON, MO.)

1) What is new with your company and/or any OPE industry associations that you represent?

Steven D. Purdy (SDP): In 2016, our company intensified the implementation of its management succession plans. Our senior management group is now among the youngest of any of our peers; I anticipate more movement on this front throughout our industry, both at the manufacturing level (particularly small, closely held manufacturing companies) and in distribution.

2) How will the election of Republican Donald Trump as president, along with Republicans maintaining control of Congress in both the House and Senate, impact the OPE industry?

SDP: Assuming that President Trump continues to focus on what were his primary campaign issues, I can’t see where he will have a significant impact on the manufacturing and distribution components of our industry one way or another. The vast majority of the products we employ are produced either in the U.S. or Asia. It has proven to be a challenge to competitively produce most wheeled goods overseas, due to high cube and weight characteristics. Mexico has not been a major producer of products used in our space either, so whatever President Trump does to tinker with our trade agreements in North America, our industry won’t be substantially affected. However, because much of the labor deployed in the grounds care segment is of Mexican descent, many will be keeping a watchful eye to see if ANY of the wild campaign promises made by President Trump to clean up immigration actually come to fruition.

3) What was the OPE industry’s biggest story in 2016, and what do you predict it will be in 2017?

SDP: 2016 was a relatively quiet year in our industry. Major acquisitions/consolidations have quieted for the time being. Much of the significant consolidation and/or channel realignment we are seeing, at least in the short term, can be found in the distribution sector.

4) What will be the OPE industry’s hottest trends in 2017?

SDP: I think one of the hottest trends for 2017 (and beyond) will be to design products that translate well with younger, professional consumers. What will that look like? I don’t think that we know for certain. The exciting thing is that this group has no pre-conceived notions about what outdoor power equipment should look like, or how it should “behave.” They DO want easy-to-use, reliable, eco-friendly products that require little maintenance. They relate well to products that deliver high feature content more so than brute or brawn.

5) What is your overall outlook for the OPE industry in 2017?

SDP: I believe that the outlook for the OPE industry in 2017 is reasonably bright. The housing market, even where it has been lagging, is looking strong for the coming year. We generally do well in periods where housing starts are healthy. Just as in retail in general, we are moving evermore toward e-commerce. This includes the purchase of new products, as well as service parts and accessories. We are seeing all sorts of emerging enterprise designed specifically to take advantage of this trend. Because our industry is lagging on this front, I look for stronger-than-average growth in the area of e-commerce.

 

 

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