Commercial Laundry, Drycleaning, and Pressing Machines

SIC 3582

Companies in this industry

Industry report:

The commercial laundry, dry cleaning, and pressing machine industry encompasses companies primarily engaged in manufacturing nonresidential laundry equipment. Coin-operated machines are classified in SIC 3633: Household Laundry Equipment.

Industry Snapshot

The commercial laundry equipment manufacturing industry was up and down during the first decade of the twenty-first century. Although early in the decade production and sales slowed due to a recessive economy and a slowdown in commercial construction, by the middle of the decade, manufacturers reported improvement as companies placed more money in capital investment projects to build new or upgrade existing facilities and commercial construction was on the rise. In 2008 and 2009, however, sales faltered again, like in many other industries in the United States, as an economic recession took hold in the country and construction, both commercial and residential, ground to almost a halt.

According to the U.S. Census Bureau, hotels, hospitals, and contract laundry services that served commercial and institutional customers were the biggest consumers of commercial laundry equipment. Dry cleaners represented approximately 15 percent of the market. Government institutions, including the armed services, prisons, schools, and hospitals, were among other major purchasers.

Background and Development

Maytag Corporation introduced the first electric washing machine in 1907. However, commercial laundry equipment producers did not achieve widespread market penetration until the 1950s. The proliferation of hotels, hospitals, and government institutions during the post-World War II economic boom pushed industry revenues to almost $300 million annually by the end of the 1970s. Continued growth in demand during the 1980s, particularly in hotel and hospital markets, increased sales to $587 million by 1988.

The commercial laundry industry faltered in the late 1980s and early 1990s as recession gripped the U.S. economy. Sales plummeted to $480 million during 1989 and bobbed up to only $526 million in 1990. Commercial construction markets remained sluggish in the early and middle years of the 1990s. However, increased sales to institutional consumers helped some manufacturers stabilize their earnings. An increase in new construction in 1993 and 1994 partially renewed industry optimism.

In the mid-1990s, manufacturers attempted to boost profits by building machines that were more energy efficient, conserved water, and offered more features. Pellerin Milnor Corp., for example, introduced a valve that allowed commercial washing machines to reuse water. Speed Queen designed a line of commercial laundry machines that took more time, effort, and noise to steal. The machines also increased dryer airflow and allowed easier loading and servicing.

In 2000 and 2001, the industry had $626 million in shipments, compared to $636 million in 1999. The cost of materials remained steady at $359 million in 1999 and 2000. The number of employees fell from 4,204 in 1999 to 3,781 in 2000, with production workers, who earned an average hourly wage of $14.29, representing 2,735 of that year's figure. In 2002, shipment values declined to $574 million as the industry felt the delayed effects of the recessive economy, which began after the terrorist attacks on the United States on September 11, 2001. Capital expenditures fell significantly from more than $24.5 million in 2001 to $13.6 million in 2002, which was a 45 percent decline. This freeze in spending also was reflected in the declining workforce. From 3,025 in 2002, the number of production workers fell to 2,081, down more than 25 percent from 2000.

During the mid-years of the first decade of the 2000s, industry leaders experienced a slight rebound from the economic slowdown of the early years of the decade, which kept the industry on stable footing, despite declining revenue. The bulk of sales were for replacement units and replacement parts, and as the pace of the economy picked up, manufacturers anticipated increased sales of new, technologically advanced models that would sell at higher prices and thus boost revenues. Factors continually under review in the industry were improved efficiency, especially water use, and a reduction of environmental impact. The global economic recession did impact the industry, however, as 2006 shipments totaled $722 million, then increased to $774 million the next year, only to drop to $769 million in 2008. According to the U.S. Census Bureau, by 2009 the value of shipments had plummeted to $610 million.

In the late 2000s, the largest product group in this industry was commercial laundry equipment, which accounted for about 56 percent of industry shipments. Commercial washing machines constituted the second largest sector, followed by pressing machines.

Current Conditions

According to Dun and Bradstreet, in 2010 about 271 U.S. establishments engaged in manufacturing laundry and dry cleaning equipment and pressing machines for commercial and industrial use. Together these firms, which operated at 77 percent capacity, generated $757.2 million in sales and employed 5,373 people. A majority of the businesses were small, with more than 75 percent employing fewer than 10 workers. However, 60 percent of the people who were employed in the industry worked for larger companies that had more than 100 employees.

Wisconsin employed the most workers in the industry, followed by Louisiana and Michigan. Wisconsin, home of industry leader Alliance Laundry Systems, was also the number-one state in terms of revenue, accounting for 53 percent of total sales in 2010. Illinois and Massachusetts followed at a far distance, with 6 percent each. Commercial laundry equipment was the largest product category, with annual sales of $2.4 million in 2010. Commercial dryers accounted for $609 million in sales, and commercial washing machines for $309 million. Other smaller categories included dry cleaning equipment, pressing machines, extractors, ironers, rug cleaning and napping machines, and feather cleaning/sterilizing equipment.

The outlook for the industry had improved by 2011. One market research report released in October 2011 noted that companies continued to try to improve on designs of machines and stated that "the latest technologies in the commercial laundry machinery market are focused on energy efficiency and improving cycle time." Environmental concerns continued to be an ongoing challenge in the industry, and manufacturers strove to meet the demand for "greener" machines and processes, as well as higher safety standards such as those set out by the Healthcare Laundry Accreditation Council (HLAC).

Industry Leaders

Alliance Laundry Systems LLC of Ripon, Wisconsin, was one of the largest U.S. distributors of commercial laundry equipment in the early 2010s. As a subsidiary of Alliance Laundry Holdings, Alliance produced commercial equipment under the brand names of Speed Queen, UniMac, Huebsch, and Ajax. Founded in 1908, the company posted sales in 2010 of around $145.4 million Other leading U.S. companies primarily engaged in the production of commercial laundry equipment included Pellerin Milnor Corp. of Kenner, Louisiana, with 2010 sales of $45.9 million, and American Dryer Corp. of Fall River, Massachusetts, with 2010 revenues of $46.6 million.

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