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Show BRIGHTENING PROSPECTS FOR APPLIANCE MAKERS Manufacturers of major electrical household appliances, like so many other American enterprises, have suffered through the adverse conditions of one of the longest recessions in our history. For most of 1982 recessionary conditions held sway and the environment for appliance sales was paced with operating difficulties. dif-ficulties. Dramatic heights of unemployment, unemploy-ment, prohibitively high borrowing costs, and a decided lack of consumer confidence resulted in reduced demand and generally disappointing returns for the manufacturers. There was a glimmer of hope in the waning months of 1982 when shipments of major appliances registered year-to-year gains. On balance though, 1982 was a year of disappointment. CHANGE IN HOUSING Housing activities have oftentimes been in the forefront of an economic recqvery. And for some months now, there has been a notable pickup in housing fueled by the decline in key interest in-terest rates. Admittedly, the lion's share of new appliances is merchandised in the replacement arena, but the increased vibrance in housing is a definite plus in the outlook for 1983's appliance sales demand. It's worthy of note, too, that newly built units in today's marketplace usually feature a broad array of appliances and in some cases they are of the sophisticated high-profit-margin nature. Hence, we view the upbeat housing activity ac-tivity as a plus for appliance prospects. HEALTHIER POSTURE OF MAKERS We look for gains in the unit volume of applicances shipped in 1983. Moreover, the manufacturers expected to participate par-ticipate in the recovery of appliance demand de-mand are in much better shape than has been the case for some time. In fact, horrendous hor-rendous conditions prevalent last year brought about a good measure of im- provements albeit partially indirect. In an effort which bodes well for better bet-ter appliance sales is the broadening of product lines or newimproved units. Not only do new products continue to come on the market, but some of the well-known well-known items have become even more sophisticated via the use of spaceage electronics. For example, Raytheon, a leader in appliances, has introduced a new coffee maker which permits restaurants to offer of-fer real expresso coffee in two minutes in any microwave oven. Whirlpool and General Electric also have appliances with electronic controls. And Raytheon's Amana Division recently introduced a high-efficiency furnace which has a promising pro-mising future. Overall, we anticipate further advances ad-vances in appliances with growth in units ' featuring integrated circuits the tiny silicon chips which changed the computer com-puter industry. PROFIT PROMOTERS In line with our projections for an economic betterment, we also feel appliance ap-pliance sales will gradually improve in 1983. The average life of most major appliances ap-pliances is 10 to 15 years, and the last really great year for the industry was 1973. Indeed, industry shipments in the first two months of 1983 were 4.2 percent ahead of the year before. Furthermore, consumers' real disposable income another key to buying buy-ing decisions is expected to rise this year. Also, interest rates are well below year-earlier levels. In a recent study of the majors in the appliance field, the Research Department Depart-ment of Babson's Reports Inc. has concluded con-cluded that there are more pluses than minuses in the outlook for this manufacturing manufac-turing segment. Hence, they are advising advis-ing their clientele to maintain stock commitments com-mitments in this sector. |