STOCKHOLM (Reuters) - Sweden's Electrolux (>> Electrolux) expects its main home appliances markets to grow next year, with raw material costs rising at a slower pace than in 2017, it said on Thursday.

In its first full outlook for next year, the rival of U.S. Whirlpool Corp (>> Whirlpool Corporation) said it expected industry demand to rise 1-2 percent in Europe and 2-3 percent in North America.

The company also said it expected to raise capital expenditure for the coming 3-4 years, signalling a renewed emphasis on growth after a year of boosting margins.

Electrolux has been weeding out less profitable product lines and fine-tuning production, helping it reach a long-elusive 6 percent operating margin in the past two quarters.

"We’re very pleased with our improved operating margin performance, which provides a solid base to take the next steps towards targeted growth and over a business cycle reach Electrolux financial targets of at least 6 percent EBIT margin and 4 percent growth," CEO Jonas Samuelson said in a statement.

Electrolux, which also competes with Asian firms such as LG Electronics (>> LG Electronics Inc.) and Haier Group, is holding a capital markets day with presentations for investors, analysts and media on Thursday.

Higher raw material prices, primarily for steel, have taken a toll on white goods makers this year, with Electrolux forecasting a 1.4 billion Swedish crowns (126.30 million pounds) hit to 2017 earnings from input costs.

It said it expected cost efficiencies to offset a hit of around 1 billion crowns from input cost increases in 2018.

The maker of appliances under brands such as Frigidaire and AEG, as well as Electrolux, forecast capital expenditure of around 6 billion crowns for 2018, focussed on "product architectures, automation and innovation".

Shares in Electrolux are up 28 percent this year, outpacing a gain of just under 10 percent in the STOXX Europe personal and household goods index <.SXQP>.

(Reporting by Niklas Pollard and Johannes Hellstrom; Editing by Terje Solsvik and Mark Potter)

Stocks treated in this article : Whirlpool Corporation, Electrolux, LG Electronics Inc.