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Factoids

Factoids offer brief snapshots of current topics pertinent to the Furniture industry based on our on-going research. Increase your grasp of current trends, consumer attitudes, and shifts within the industry through solid statistics and concise insight.

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Factoids

Housing Starts Not Keeping Up with Demand Furniture and Housing Indicators Industry Sales, Housing Starts, Household Formations

Although the U.S. now has a healthy economy, incomes are on the rise, and growth in household formations has finally started to normalize, the housing industry cannot keep up.

This is the first factoid in a series of five factoids detailing slow-to-grow housing starts, low inventories, and rising mortgages and rents.

The rebound of residential construction continues to be slow well past the recession and the affordability for middle-income households continues to narrow. Labor shortages and the rising cost of land and materials has led to housing being built primarily for the higher end of the market. At a time when Millennials are fully entering their home buying years, many are being locked out – not boding well for the furniture industry.  

Fewer homes are being built per household than at any time in U.S. history. According to Joint Center for Housing Studies estimates, annual construction should now be on the order of 1.5 million units, or about 260,000 higher than in 2018.

This factoid shows the key economic indicators since 2011 when the recovery from the recession began in full swing. Through 2018, the furniture industry has shown consistent growth, but industry sales slowed in the first quarter of 2019 – only increasing by 1.8 percent from 2018 Q1 to 2019 Q1. Meanwhile housing starts through May of this year are showing negative growth, down 1 percent compared to last year. Household formations are increasing at a faster pace in recent years – 112,000 units higher than housing starts from 2017 to 2018.

Source: U.S. Census Bureau, U.S. Dept. of Housing and Urban Development; Current Population/Housing/Vacancy Survey
*seasonally adjusted

Generation Z: The iGeneration Gen Zers Have Significant Influence on Family Spending

During the next five years, over 20 million consumers tagged as Generation Z will pour into young-adult status with the leading edge surpassing the age of 21 this year, graduating from college and entering the workforce. This is the final factoid in a series of four factoids detailing the demographics and shopping preferences of the newest adult generation.

Because the internet/smartphones and brick and mortar shopping have always been a part of the fabric of Generation Z, it has never been an either/or experience, but rather the two meld together. Smartphones serve as support for the brick and mortar shopping experience, not a competition to it. Studies and surveys are being published almost monthly, detailing how young Gen Zers currently shop.

In a survey by the IBM Institute for Business Value, “Uniquely Gen Z,” Gen Zers were questioned on items most purchased themselves and purchases by their parents they heavily influenced. The top purchased items by Gen Zers are clothes and shoes, books and music, apps and toys and games – over 50% of respondents choosing these items. While a low amount actually bought furniture themselves (15 percent), 76 percent responded that they have influenced parents on furniture purchases.

With the influx of Millennials, many brick and mortar stores strengthened online capabilities. Now arrives Generation Z, demanding a fully integrated shopping experience and forcing internet-only companies to turn toward brick and mortar options.

Source: “Uniquely Gen Z, “IBM Institute for Business Value (IBV), global survey of 15,600 Gen Zers between the ages of 13 and 21, as well as interviews with 20 senior executives

Generation Z: The iGeneration Studies and Surveys Showing How Gen Zers Like to Shop

During the next five years, over 20 million consumers tagged as Generation Z will pour into young-adult status with the leading edge surpassing the age of 21 this year, graduating from college and entering the workforce. This is the third factoid in a series of four factoids detailing the demographics and shopping preferences of the newest adult generation.

Media and Shopping Preferences

Because the internet/smartphones and brick and mortar shopping have always been a part of the fabric of Generation Z, it has never been an either/or experience, but rather the two meld together. Smartphones serve as support for the brick and mortar shopping experience, not a competition to it.

Gen Z are “more traditional shoppers than Millennials,” said Katherine Cullen, director of retail and consumer insights for NRF. “They are killing the idea that online and offline are separate.” It will be interesting to see as these young Gen Zers age into personal credit cards if their shopping habits move more online.

According to Brandon Pierce at SPS Commerce, the previous generation of Millennials “is accused of killing this or that industry (also television sitcoms, traditional sit-down dinner dates, golf and of course, retail shopping at malls and stores). In reality, they are only disrupting the way things have been. They still buy the products they want, consume media like movies and shows, buy groceries and eat food from restaurants. They just prefer to go about it differently. It’s a matter of needing to change old, traditional ways of marketing and selling to keep up with a younger generation’s preferred way of living. Basically Generation Z is going to be an intensified version of the Millennial tidal wave of change.”

Studies and surveys are being published almost monthly, detailing how young Gen Zers currently shop. Currently 98% of Gen Zers prefer to shop in brick and mortar stores, while almost half (46%) research items on smartphones before making in-store purchases. 60% prefer the mall to shopping – likely due to socialization and inability for younger teens to drive to multiple retail locations. 70% influence family decisions regarding items such as furniture, household goods, and food and beverage.

Generation Z – The iGeneration College Enrollment and Early Education

During the next five years, over 20 million consumers tagged as Generation Z will pour into young-adult status with the leading edge surpassing the age of 21 this year, graduating from college and entering the workforce. This is the second factoid in a series of four factoids detailing the demographics and shopping preferences of the newest adult generation.

College Enrollment and Early Employment

On their way to becoming the most college-educated, Generation Z has the highest percent of 18 to 20-year-olds enrolled in college among those no longer in high school – at 59% in 2017. Millennials in 2002 were the first generation to reach over half (53%) of young adults in college – up from 44% of Gen Xers in 1986.

Generation Z will enter the workforce with the least job experience of any cohort. Only 19% of Gen Z teens 15 to 17-year-olds in 2018 were employed full or part time during the previous year compared to 30% of Millennials the same ages in 2002 and 41% in Gen Xers in 1986. Numbers are also lower for Generation Z 18 to 21-year-olds with only 58% holding a job in 2018, compared to 72% and 78% of Millennials and Gen Xers, respectively.

Although many Gen Zers have not been in the workplace, numerous studies indicate they have an advantage over older Millennials. According to Dan Schawel, founder of Millennial Branding, “They (Gen Z) appear to be more realistic instead of optimistic, are likely to be more career-minded, and can quickly adapt to new technology to work more effectively.” He adds that “they come to the workplace better prepared, less entitled and more equipped to succeed.”

Coinciding with college education, many in Generation Z are born to more affluent families with parents having relatively higher education than previous generations. Expressed in constant 2017 dollars, Generation Z, ages 6 to 21 in 2018, lived in households with an average income of $63,700 – 2.1% higher than Millennials in 2002. In 1986, Gen Xers lived in households with an average income of $52,800 – 20.6% below today’s Generation Z.

Source: Data extrapolated from report by Pew Research Center, November 2018, "Early Benchmark Show 'Post-Millennials' on Track to Be Most-Diverse/Best -Educated Generation Yet"

Pew Research Center analysis of 1968,1986,2002 and 2018, Current Population Survey Annual Social and Economic Supplement (IPUMS). “Early Benchmarks Show Post-Millennials on Track to be Most Diverse, Best-Educated Generation Yet” – Pew Research Center

Note: Household incomes are as of the previous calendar year and are scaled to a three-person household and expressed in 2017 dollars. Poverty status is as of the previous year. Housing tenure as of March of the given year.

Industry Sales by Quarter 2012 Q3 to 2019 Q3 Bedding Industry

Preliminary estimates of Bedding growth in the third quarter of this year indicate sales have rebounded somewhat from the poor second quarter that saw declining imports and instability at retail. Sales estimates of $4.5 billion in 2019 Q3 put growth at 3% over to the same quarter last year. Unsettled trade wars further contribute to industry uncertainty.

Bedding sales have struggled the last couple of years with slow growth again in 2019. However, initial estimates indicate the second quarter of this year grew 3% over the same quarter 3 in 2018. 

2019 Bedding sales year-to-date totaled $4.5 billion, up 0.1% over the same three quarters last year. 

Source:  Impact Consulting Services, Inc. industry model 
All years have been revised based on comprehensive revisions by the Department of Commerce to Personal Consumption Expenditures

Industry Sales by Quarter 2012 Q3 to 2019 Q3 Furniture & Bedding

After a dip in first quarter furniture and bedding sales this year, the furniture industry has picked up momentum in the third quarter. Combined Furniture and Bedding sales grew 5.7% in the third quarter versus the same quarter in 2018. Compared to the previous quarter, 2019 Q2, third quarter sales were up 3% totaling $30.57 billion.

Furniture (excluding Bedding) in the third quarter increased 6.2% versus the same quarter 3 in 2018 reaching $26.07 billion. Compared to the second quarter of 2019, Furniture sales were up only 0.4%.

After Bedding imports fell dramatically in the second quarter due to ongoing instability in international trade with China, initial estimates indicate Bedding sales in 2019 Q3 increased 3% compared to 2018 Q3 which would mean double-digit growth over a poor second quarter of this year. As final numbers become available, a clearer picture will emerge.

As shown in graphic, quarter over quarter growth slowed the end of last year and the first half of this year, but the furniture industry has picked up some steam, with the third quarter growth now up 5.7%.

Furniture (excluding Bedding) increased 6.2% in 2019 Q3 versus the same quarter in 2018 with sales of $26.07 billion.

Preliminary estimates indicated Bedding has rebounded somewhat from declining imports during the second quarter of 2019 – up 3% over 2018 Q3 at $4.5 billion, which would mean double-digit growth over the second quarter of this year.  As additional data becomes available, this growth will be updated.

Industry sales for 2019 Q3 YTD totaled $87.97, an increase of 4.3% over the same period last year. Furniture sales, excluding Bedding, totaled $75.47 billion year-to-date, up 5%, and Bedding totaled $12.49 billion – up 0.1% over the same three quarters last year.

Source:  Impact Consulting Services, Inc. Furniturecore.com industry model
Note: All years have been revised based on comprehensive revisions by the Department of Commerce to Personal Consumption Expenditures

Generation Z – The iGeneration Population, Age, and Ethnicity

During the next five years, over 20 million consumers tagged as Generation Z will pour into young-adult status with the leading edge surpassing the age of 21 this year, graduating from college and entering the workforce. This is the first factoid in a series of four factoids detailing the demographics and shopping preferences of the newest adult generation.

Researchers have been non-committal in defining the actual end of the Millennials and the beginning of Generation Z (also being called the iGeneration or iGen), but recently the generational research giant Pew Research Center has defined this cohort as being born between 1997 and 2012, a period of 16 years, matching the year span of Millennials and Gen Xers. Based on current estimates from the U.S. Census Bureau, Generation Z is currently about 8% smaller than Millennials and roughly 2% larger than the older Gen Xers, who are predominantly their parents. The impact of future immigration will swell their ranks further.

Ethnicity 

Generation Z is the most ethnically diverse of all the generations preceding it. 48% of 6 to 21-year-olds in 2018 (Generation Z) are non-white, significantly more compared to 39% of Millennials in 2002, 30% of Gen Xers in 1986 and 18% of Early Boomers in 1968. As immigration continues to impact Gen Z, they are projected to become even more ethnically diverse falling below 50% white in the future. Because of this diverseness, early indications are that they are less judgmental and more accepting of cultural differences.

Source: U.S. Census Bureau, Population Statistics; “Uniquely Gen Z,” IBM Institute for Business Value (IBV)

Furniture Industry Wages Transportation and Delivery

Wages across the U.S. job market have been slow to grow post-recession, despite a healthy economy and the lowest unemployment rates in decades and the furniture industry is no exception. The steady increase of furniture and home furnishings sales over the last 10 years has been slower to hit employees working in the stores, but in recent years many occupations have finally started to see an upturn in wage growth.

Using data from the Bureau of Labor Statistics’ March 2019 release of “Occupational Employment Statistics,” this is the final factoid in a series of five factoids detailing employee wages in furniture stores and home furnishings stores across the variety of occupations.

Transportation and Delivery

Among transportation and delivery occupations in furniture and home furnishings stores, installation, maintenance, and repair workers are among the highest paid non-managerial positions, earning a median hourly wage of $17.83 in furniture stores and $18.59 in home furnishings stores. Although light truck or delivery services and drivers earn considerably less at $13.10 and $15.47 respectively, their wages have increased by 17.5 percent and 21 percent since 2012.

Source: U.S. Department of Commerce, Bureau of Labor Statistics, “Occupational Employment Statistics,” released March 29, 2019

Furniture Industry Wages: Office and Administrative Support Occupations

Wages across the U.S. job market have been slow to grow post-recession, despite a healthy economy and the lowest unemployment rates in decades and the furniture industry is no exception. The steady increase of furniture and home furnishings sales over the last 10 years has been slower to hit employees working in the stores, but in recent years many occupations have finally started to see an upturn in wage growth.

Using data from the Bureau of Labor Statistics’ March 2019 release of “Occupational Employment Statistics,” this is the fourth factoid in a series of five factoids detailing employee wages in furniture stores and home furnishings stores across the variety of occupations.

Office and Administrative Support Occupations

By far, executive secretaries and executive administrative assistants are the highest paid among office and admin support jobs – earning a median hourly rate of $29.20 in furniture stores and $26.68 in home furnishings stores. The executive admin jobs also had the largest increases from 2012 to 2018 – jumping 32.5 percent in furniture stores and 29.8 percent in home furnishings stores.

Lowest paid among these positions are customer service reps, receptionists and information clerks, and stock clerks and order fillers – all earning less than a $14 median hourly wage.

Source: U.S. Department of Commerce, Bureau of Labor Statistics, “Occupational Employment Statistics,” released March 29, 2019 

Furniture Industry Wages Sales and Related Occupations

Wages across the U.S. job market have been slow to grow post-recession, despite a healthy economy and the lowest unemployment rates in decades and the furniture industry is no exception. The steady increase of furniture and home furnishings sales over the last 10 years has been slower to hit employees working in the stores, but in recent years many occupations have finally started to see an upturn in wage growth.

Using data from the Bureau of Labor Statistics’ March 2019 release of “Occupational Employment Statistics,” this is the third factoid in a series of five factoids detailing employee wages in furniture stores and home furnishings stores across the variety of occupations.

Sales and Related Occupations

Sales and related occupations are among lowest paying jobs in furniture stores and home furnishings stores. These have also been the slowest in earnings growth. In both distribution channels, cashiers earn a median hourly rate below $12. Wages continually dropped for cashiers through 2012 to 2015, before growing in recent years – most likely due to minimum wages going up in many cities and states. Retail salespersons make more in furniture stores with a median hourly wage of $13.94, compared to $12.40 in home furnishings stores. The most startling statistic is that between 2012 and 2018, earning for retail salespersons in furniture stores grew only 6.5 percent and 5.9 percent in home furnishings stores.

Source: U.S. Department of Commerce, Bureau of Labor Statistics, “Occupational Employment Statistics,” released March 29, 2019.