Market Snapshot: Lawn & Garden

Power lawn and garden equipment OEMs are facing a combination of pressures today, but that’s good news for plastics, according to Gavin Jewell, market sector leader for BASF’s Engineering Plastics Business. He says that profits at OEMs have been squeezed lately between Big Box retailers demanding that OEMs hold down prices and the competing demands of higher raw material prices for metals and plastics. “Compared to metals, though, plastics continue to provide an excellent value to our customers,” he adds, “in terms of design flexibility, performance, and cost.”

Demand in the United States for mowers, trimmers, edgers, chainsaws, and other products with significant plastics content is projected to approach $10 billion in 2007 (Freedonia Group, Cleveland, OH). Lighter-weight and higher-horsepower products are at the top of consumers’ wish lists, along with innovations such as zero-radius riding mowers.

These trends, again, bode well for increasing the plastics content in this market. Consumption of plastics in power lawn and garden equipment is projected to rise 7.6% annually through 2007, according to Freedonia, reaching $360 million. As OEMs look to decrease weight, advance ergonomics, and consolidate parts to reduce cost, molded plastic will increasingly displace steel and other metal parts. In addition, gains should come from the improving outlook for overall sales, shown in Table 1.

Tempered Projections

Despite these gains, the forecast for the coming year remains relatively flat, says the Outdoor Power Equipment Institute (OPEI), an international trade association representing OEMs and suppliers of consumer and commercial outdoor power equipment. OPEI cites a slowdown in home sales, higher oil prices, and pressure from the Federal Reserve on interest rates as the driving factors. Projections for 2006, however, are for an increase in shipments of about 3%. In addition to forecasting, OPEI compiles historical data from member companies on shipments (Table 2).

Shipments of consumer lawn and garden power equipment totaled nearly 8.6 million units during the 2004 model year (September 2003 to August 2004), which translates into a market expansion of 5%, according to OPEI estimates for the entire industry. Walk-behind units climbed by 6% to just less than 6.5 million units, while all riding mowers rose 3%, to just more than 1.8 million units. (OPEI conducts a monthly shipments research program that represents 85% to 99% of all industry shipments, depending on specific products.)

BASF’s Jewell believes overall unit sales growth in this industry will remain fairly consistent with GDP. “Sales finally recovered to their predownturn levels in 2003,” he explains. “The 2004 numbers should show continued growth in the 5% range, but some items, namely generators and chainsaws, saw a significant boost due to natural disasters such as the Florida hurricanes.”

Jewell forecasts plastics growth will be higher than unit growth, especially in engineering resins—primarily nylon—thanks to continued metal-to-plastic conversion on items like air intake manifolds, multifunction engine covers, and fuel system parts. “We may begin to see movement toward China, although it hasn’t happened to near the extent as in power tools,” he adds.

BASF also sees competing trends in materials for the lawn and garden segment.

Because of intense price pressures, OEMs continually attempt to replace metal with plastic, and to replace costlier engineering resins with more commodity materials, especially in the OPP (opening price point) segment. Competing with this is the demand for higher-heat materials needed to handle hotter-running engines brought about through emissions requirements. Also, engineering resins (mainly nylon and acetal) will see increased demand in fuel systems as California Air Resources Board (CARB) and EPA regulations mandate low-permeation fuel tanks, fittings, hoses, and caps due to begin in 2007 or 2008.