Furniture Moves to Recover

April 4, 2016  by in Industry   

After a long uphill battle for the furniture industry, furniture and bedding sales have finally met and exceeded the pre-recession peak sales of 2007.

The majority of this positive growth in 2015 has occurred in large Metropolitan Statistical Areas (MSAs), while many Micropolitan Statistical Areas (Micro SAs) and Rural Areas are still struggling to make a full recovery.

The furniture market trudged through eight years of recession and slow growth to finally dig out and surpass its performance in 2007. As shown in Table A, the industry plummeted 17.4 percent in two years, but it took another six years to recover and grow 24.4 percent to sales of $92.2 billion last year.

 

In both 2007 and 2015, MSAs controled 90.6 percent of industry sales with smaller Micropolitan Statistical Areas totaling 6.2 percent and the remaining 3.2 percent spread among the rural areas (Table B). All three market types are now above 2007 levels. MSAs took a nosedive in 2009 – dropping 17.7 percent as Micro SAs and Rural Areas decreased 14.4 and 13.6 percent.

While the larger markets had the greatest declines, they have also made the biggest comeback – growing 24.8 percent in comparison to 20.4 percent and 20.9 percent in the smaller markets and rural areas. 

 

Number of Markets

In 2015, the industry as a whole finally exceeded 2007 peak sales, but many markets are yet to fully recover. Out of 937 total markets, 533 have surpassed 2007 sales, and 404 are still fighting their way back (Table C). Forty-two percent of MSAs fell short of 2007 levels, and Micro SAs have similar numbers with 43.7 percent below the peak sales of eight years before.

 

Sales by Markets

Table D shows the percent of industry sales in markets that are thriving versus the markets that are still playing catch-up. The markets exceeding 2007 peak levels account for more than 61 percent of industry sales with MSAs and Micros holding similar outcomes.

 

MSAs by Region

Breaking up the MSA markets by region, Table E shows the Northeast struggling to return. It is the only region in which the majority of the MSAs are falling short of pre-recession sales.

While more than 50 percent of MSAs in the Midwest and South have recovered in industry sales, the West is topping the country with more than 70 percent of MSAs exceeding 2007 peak sales.

 

MSA Sales by Region

The percent of markets by region exceeding 2007 sales does not exactly correlate with the percent of region sales by market type as shown in Table F.

Despite the fact that fewer than half of MSAs in the Northeast had sales in 2015 that exceeded 2007, the New York-Jersey City-White Plains MSA (a division of the broader New York CBSA) helped pushed percent of sales in 2015 past the 2007 level for the region. Likewise in the Midwest, the Chicago-Naperville-Arlington Heights MSA division has yet to fully recover impacting the poorer sales performance of its region. 

 

MSAs by industry Sales Range

Segmenting MSAs by industry sales range gives another perspective of market performance. Not surprisingly, the MSAs with industry sales of more than $1 billion are having the highest percent of sales exceeding 2007 levels in 2015 (Tables G and H). With only 14 of the 401 total MSAs, the highest sales bracket exceeded pre-recession sales in 10 of those markets which accounted for 73.7 percent of those industry sales.

 

MSAs in the top two industry ranges (more than $500 million) were responsible for roughly 63 percent of total sales surpassing pre-recession levels in 2015. All in all, the MSAs within the largest industry sales ranges have pushed the furniture and bedding industry out of the recession.

A sampling of performance of the top and bottom three MSAs by size range is shown in Table I. Texas was clearly regionally among the least impacted during the recession, and Florida among the worst.

 

Editor’s Note: Sales analysis is provided by Atlanta-based Impact Consulting Services, parent company of Home Furnishings Business. The data is part of a proprietary model that tracks retail furniture and bedding sales at the market level. Sales include bedding, upholstery, bedroom, dining room, occasional, outdoor, and other miscellaneous furniture items. Sales tax is excluded. Data for all years is calculated based on current market geographical boundaries.