SIC 3639 Household Appliances, Not Elsewhere Classified
SIC 3639
This industry includes establishments primarily engaged in manufacturing household appliances, not elsewhere classified, such as water heaters, dishwashers, food waste disposal units, and household sewing machines. Major product groups include water heaters, dishwashers, food disposers, trash compactors, floor waxers, and sewing machines. Laundry equipment, refrigerators, and other major household goods are classified separately, as are commercial appliances.
335212
Household Vacuum Cleaner Manufacturing
333298
All Other Industrial Machinery Manufacturing
335228
Other Household Appliance Manufacturing
A uniquely American innovation, electric and gas household appliances became commonplace in U.S. homes during the postwar economic expansion of the 1950s, 1960s, and 1970s. By the early 1980s, miscellaneous appliance makers in the United States were shipping about $1.5 billion worth of goods each year and employing a workforce of more than 14,000. Continued rapid growth in the 1980s pushed industry sales past $3.2 billion by the early 1990s. In the late 1990s, industry shipments were valued at $3.7 billion. In 1997, combined sales were approximately $2.9 billion for just the water heater, dishwashing machine, floor-care machine, food waste disposal, and household trash compactor industry segments. Industry projections expected growth in the total shipment value of this industry to continue at about 3 percent annually through 2012.
Although limited due to manufacturing consolidation, intense competition, and market maturity, growth in this industry seems assured as the economy stays strong and demographics change.
The largest segment of this household appliances category is water heater manufacturing, which accounts for roughly 40 percent of industry sales. Dishwashers, the second largest product category, are trailed by trash compactors, disposers, floor waxers, sewing machines, and related supplies and attachments.
Appliance sales are driven primarily by three factors: replacement sales; product market penetration, particularly in the case of completely new appliances; and new construction, which generates demand by builders that perform first-time installations. Because most product categories have achieved almost full market penetration, miscellaneous appliance sales are highly dependent upon replacement sales and new construction, and are closely linked to housing starts and economic growth.
Pricing is very competitive. According to Standard & Poor's, "To gain or simply maintain market share, domestic appliance manufacturers have endeavored over the past few years to offer consumers more product at a lower price, to improve relationships with the strongest distributors, and to keep operating costs down." Manufacturers attempt to keep costs down by more efficient manufacturing and through restructurings, and work to build brand loyalty, especially in the replacement market.
The appliance industry can be differentiated from other manufacturing sectors by its production characteristics. Appliance manufacturing is essentially an assembly-line process whereby ready-made components are assembled. Because it has low fixed costs and is labor intensive, appliance production offers abundant opportunities for manufacturing efficiency gains. This characteristic contributes to a high weight-to-value ratio that limits overseas appliance imports into the United States, and caused prices to remain effectively fixed during the 1980s and into the 2000s.
Appliances are mainly sold through retail outlets, which have trained workers. Manufacturers usually ship products to warehouses from which they are distributed to retailers. However, some large retailers, such as Sears, Roebuck & Co., establish agreements with manufacturers for shipments directly to their warehouses. While manufacturers generally used the Internet only for providing product information to consumers, with the rise of e-commerce in the 2000s, retailers like Sears were using the Internet to offer products for sale online.
The two main types of water heaters are electric- and gas-powered. Gasheaters made up over half of all residential water heater sales in 2002. Although electric heaters are often priced lower, gas heaters usually operate lessexpensively. Most water heaters consist of a tank that is made of galvanized iron or aluminum alloys and holds between 20 and 140 gallons. A glass or plastic liner is used to reduce corrosioninside the tank. Water temperature can be adjusted between 100 and 200 degrees Fahrenheit. In2002 U.S. producers sold about 4.99 million gas water heaters and $4.39 electric water heaters.
The two main categories of household dishwashers are portable and built-in. Built-ins were by far the major type. Manufacturers shipped a total of 6.2 million dishwashers in 2002. Most dishwashers use pumps and impellers to throw the same water against dishes over and over to clean them. Fresh rinse water is then used. The cycle is typically completed by heat-drying the dishes. About 50 percent of all U.S. homes had a dishwasher in the early 1990s, up from 45 percent in 1980. However, in the late 1990s dishwashers still were not considered a must-have appliance by homeowners, and they had a low market saturation in...
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