In an interview today on CNBC, Whirlpool CEO Jeff Fettig said that he’s “optimistic that a rebound in the U.S. housing market and consumers’ need to replace old appliances will boost Whirlpool appliances sales during the next three to five years.” More specifically, he said that “Consumers will begin to replace appliances bought during the early part of the housing boom in 2003. I really believe we have a significant amount of pent up demand today and we’ll get a catalyst from both housing and the replacement cycle over the next three to five years.”
The chart above shows the current-cost average age at yearend of consumer durable goods from 1950 to 2011, according to data from the Bureau of Economic Analysis. For household appliances (blue line in chart), the average age at the end of 2011 was 5.3 years, which is the highest average age since 1997, and up from 4.7 years in 2006. For all consumer durable goods (red line), the average age at the end of 2011 was 4.6 years, the highest average age since 1962, almost 50 years ago. The average age of automobiles owned by U.S. households was 4.4 years in both 2010 and 2011, while the average age of light trucks was 4.3 years in those same years. For both autos and trucks, those were the highest average ages since the 1940s.
In a related Bloomberg story today, Neil Dutta, Renaissance Macro Research LLC’s head of U.S. economics, said that “Americans may soon start buying more cars, appliances and other items because the ones they own are the oldest in almost half a century,” which was a reference to the 4.6 year average age of consumer durable goods being the highest since 1962.
In a note to clients, Dutta cited increased spending to replace aging durable goods like appliances and automobiles as “one reason why U.S. economic growth is poised to accelerate,” according to the Bloomberg report.