After two consecutive years of zero-growth in 2022-2023, 2024 marked the start of a recovery for the industry, with global revenue up by +5%, driven by an easing of energy prices and stabilization of geopolitical tensions in Ukraine. Improving household confidence drove new demand for consumer durables, underpinned by stronger purchasing power as inflationary pressure abated worldwide. In the main developed markets, and more specifically in Europe, households have strong spending capacities due to high savings accumulated during the energy crisis (the savings ratio in the EU reached 15% in Q1 2025). We expect the recovery to continue in 2025/2026 as consumer prices continue going down in Europe, driven in part by the export of deflationary pressures from China, and declining interest rates should ease credit access for households. This will also help shore up real estate activity, which matters for the sector as low home turnover generally comes with low demand for new equipment.
The recent development of the new generation of home appliances, incorporating new connectivity and generative AI technology, is another positive catalyst that is expected to boost demand as new functionalities should spark households' interest. However, to transform interest into mass consumption, households still need to be convinced not only of the lasting benefits of AI technology but also about the security of their personal data. As a result, we expect a gradual spread of the positive effects of the “connectivity” boost. Stronger growth could materialize around 2030 and afterwards (resp. 2026-2028 CAGR of +4% for domestic appliances and +3% for consumer electronics). A high innovation-driven price premium and the longer lifespan of this new generation of equipment could also mitigate revenue expansion. While consumer electronics and home appliances are better positioned to benefit from the higher connectivity footprint in global economy, furniture is the segment with stronger growth potential (+7% CAGR over 2026-2028) due to a lag in the recovery process and a stronger boost potential in the short term, coming from a likely real estate revival.
However, risks to the recovery include the deterioration of the trade environment caused by the new US tariff regime and resurging geopolitical tensions in Middle East, which could potentially cause disrupt some supply chains that are mostly located in Asia, notably for domestic appliances and consumer electronics. Higher volatility of raw material, energy, transportation or containership prices could inflate retail prices for home equipment, and more generally hurt households' willingness to spend.
Despite a substantial deterioration of revenue in 2022-2023, home appliance specialists limited damages and stabilized their profit margins around 6% against 7-8% on average during Covid-19 and the post-Covid recovery period. This is a good signal underlining an efficient management of costs but also the industry's strong resilience against headwinds. While there was no major margin improvement in 2024, we expect a modest recovery in 2025 that could maintain the momentum in 2026-2028, provided no economic or geopolitical risks materalize that hurt global demand or disrupt international supply chains.
