Epperson Forecast Offers Hope For Late 2009

October 20, 2008  by in UnCategorized   

By Home Furnishings Business in on October 2008 As the furniture industry’s doldrums extend into a third year, analyst Jerry Epperson of the investment banking firm Mann, Armistead and Epperson told reporters Monday that hopeful economic signs have been spotted on the distant horizon.

Speaking at the American Home Furnishings Alliance’s annual High Point Market kickoff event, he said the U.S. economy as a whole will likely see a 3 percent decline in gross domestic product in the fourth quarter, experience a 1.5 percent drop in the first quarter of 2009 and be flat in the second quarter.

After experiencing that economic pain, “We’re going to see some growth in the third quarter,” he said. “The situation we now have is somewhat severe, but it is going to be shortlived.”

He said the severity of the industry’s current slump can best be seen in the mattress sector, which is the midst of what will likely be its third year with a sales decline since 1973. But, while the previous dips were relatively shallow--ranging from 0.3 percent to 1.9 percent--mattress sales from January to August of this year have dropped 8.3 percent. In fact, mattress sales in August were off 16.1 percent versus last year.

He predicts that new home construction will continue to languish into 2010, but expects a relatively quick recovery in existing home sales due in part to the fact potential buyers will see values in a market where home prices were down 9.3 percent nationwide in August versus the same period in 2007.

Summing up the prospects for the overall economy, he said, “There will be nice solid gains (late) next year and a wonderful, wonderful 2010, which can’t get here soon enough.”