Declining Trends in 2024: Economic Pressure and Supply Chain Constraints
According to EUROFER’s Economic & Steel Market Outlook 2025 2026, the electric domestic appliances sector has experienced its third consecutive quarterly contraction in 2024, with output shrinking by 2.4% in Q3. This marks a continuation of the broader downward trend that began after the post-pandemic recovery in mid-2021. After the boom in 2020 and 2021, driven by changes in lifestyle brought on by the COVID-19 pandemic, consumers now face a more challenging economic environment, which is affecting purchasing patterns across the EU.
Underlying Causes of the Decline
1. Economic Uncertainty and Consumer Caution:
The global economic environment has deteriorated since 2023, with inflation continuing to erode purchasing power. Energy costs, exacerbated by geopolitical tensions, have surged, leading to higher living expenses for consumers. As a result, many households are postponing discretionary purchases such as new home appliances, focusing their spending on essentials. These economic challenges have had a negative impact on the demand for household products, contributing to the sector's decline.
2. Supply Chain and Raw Material Shortages:
The global supply chain crisis, which had begun in 2020, has continued to affect the electric domestic appliances industry. The shortage of key raw materials, including metals like aluminum and steel, as well as microchips crucial for smart appliance functions, has led to increased production delays. Extended waiting times for orders and higher production costs have limited manufacturers' abilities to meet consumer demand. Logistical issues, stemming from both the pandemic and ongoing disruptions from Russia's war in Ukraine, have further strained the sector’s capacity.
3. Energy Price Volatility:
Energy prices soared during the 2022 energy crisis, causing significant ripple effects throughout Europe. Despite some stabilization in gas prices, consumers and manufacturers are still grappling with the long-term impact of higher electricity bills and energy uncertainty. Many households have deferred purchasing energy-intensive home appliances, such as air conditioners and heating devices, as part of efforts to cut costs in the face of rising utility expenses. This trend has added to the sluggish demand for electric appliances.
4. Shifting Consumer Behavior Post-Pandemic:
The shift in consumer priorities post-pandemic has been profound. During the height of the pandemic, home appliances were seen as essential for home-centric lifestyles, leading to a surge in purchases. However, as remote work becomes less widespread and people return to traditional offices, the demand for home appliances has slowed. The initial consumer enthusiasm for upgrading appliances has given way to a more cautious approach, with households choosing to repair existing items instead of purchasing new ones.
Forecast for 2025-2026: Modest Recovery Amid Changing Consumer Demands
Despite the ongoing challenges in 2024, a recovery in the electric domestic appliances sector is expected to take shape starting in 2025. Though the recovery will be gradual, several key drivers of growth are emerging.
Key Growth Drivers for the Electric Domestic Appliances Market:
1. Remote Work Continues to Influence Appliance Demand: Although remote work has declined from its peak during the pandemic, hybrid work models remain a significant trend. Many employees continue to work from home for part of the week, and as a result, demand for home office equipment will persist. Appliances such as smart coffee makers, ergonomic office furniture, and high-quality air purifiers will remain in demand as consumers invest in their home workspaces. The remote working trend may not reach its pandemic heights, but it will continue to support the market for home appliances that enhance convenience and productivity.
2. The Rise of Smart Homes and IoT Integration: A significant transformation in the sector is occurring with the growth of smart home technology. Consumers are increasingly looking for connected devices that offer convenience and efficiency. Smart refrigerators, voice-activated dishwashers, and automated ovens are becoming more commonplace. The integration of the Internet of Things (IoT) in domestic appliances is enhancing the appeal of products by enabling consumers to control devices remotely, track energy usage, and even automate home routines. As more appliances become interconnected and AI-powered, consumers will demand more sophisticated, efficient, and customizable appliances. By 2026, smart appliances will likely make up an even larger share of the market.
3. Sustainability and Energy-Efficient Appliances: Energy efficiency will be a critical factor in the sector's recovery. As consumers grow more environmentally conscious, there will be an increasing demand for energy-efficient and eco-friendly appliances. The EU has already set ambitious sustainability goals, and manufacturers are responding by offering products that meet these goals. Energy Star-rated products and sustainable appliances that reduce energy consumption will see growth in demand. Appliances that use renewable energy or have low carbon footprints will become more attractive as government incentives and subsidies for sustainable products are likely to increase in the coming years.
4. Technological Innovations and Consumer Expectations: Innovations in AI, machine learning, and robotics will further redefine the appliances market. AI-powered washing machines, robotic vacuum cleaners, and smart heating systems will offer personalized solutions to consumer needs. Consumers will expect smart features that make their appliances more intuitive and responsive. The technological advancement of appliances will cater to a growing desire for convenience and automation, helping the market bounce back after a period of stagnation.
5. Shifting Demographics and Emerging Markets: The rising number of Millennials and Gen Z consumers entering the housing market presents an opportunity for growth. These younger generations are more inclined to adopt smart technologies and place a premium on sustainability. As they set up their homes, they will drive demand for smart, energy-efficient appliances. Additionally, expanding middle-class populations in emerging markets may lead to a rise in appliance purchases as urbanization accelerates and disposable incomes rise in these regions.
Past Trends: The Pandemic’s Impact and Subsequent Slowdown
Pandemic Surge:
In 2020 and the first half of 2021, the electric domestic appliances market saw an unprecedented surge in demand. This was driven by remote work, schooling from home, and a general shift to home-centric activities. Home appliances such as dishwashers, refrigerators, microwaves, and smart home devices were in high demand as consumers sought to enhance their living conditions. With people spending more time at home, they were motivated to upgrade their appliances and invest in products that would improve comfort and convenience.
Post-Pandemic Slump:
However, by the end of 2021 and into 2022, the industry entered a slowdown. As the immediate crisis of the pandemic waned and people began returning to offices, consumer demand for home appliances normalized. The economic slowdown of 2023 and the energy crisis that followed, due to the geopolitical tensions in Europe, further exacerbated the industry’s woes. The supply chain disruptions, combined with inflationary pressures and high energy costs, created a tough market environment, leading to declining sales in 2023 and 2024.
Recovery on the Horizon
Though the electric domestic appliances sector has faced significant headwinds in 2024, emerging trends in smart home technology, sustainability, and evolving consumer demands offer hope for a gradual recovery starting in 2025. While challenges such as economic uncertainty, inflation, and supply chain issues will persist, long-term growth opportunities driven by technological innovations and changing consumer preferences will propel the market toward recovery by 2026. For manufacturers, adaptability and responsiveness to these shifts will be crucial in navigating the coming years.
