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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

Characteristics of Top Spending Households Region

A snapshot of today’s top-spending furniture consumers looks to be high-earning married couples, in their late 30s and early 40s with young children, living in urban areas. Using data from the 2017 Consumer Expenditure Survey, this is the final factoid in a series of four factoids delving into key household characteristics – age, income, marriage/children status, occupation, population, and region.

 

With the majority of larger U.S. urban areas in the Northeast, it is not surprising the region has the highest annual furniture expenditure at $587. And even though the South has the lowest expenditures per households at $470, because of the region’s size, the South accounts for 38.3% of total furniture spending – well above the Northeast (17.9%) and the Midwest and West, both at 22%.

Source: Consumer Expenditure Survey 2017, Bureau of Labor Statistics, which in 2017 calculated at a ratio of .63 versus Personal Consumption Expenditures published by the Bureau of Economic Analysis (see methodology box below “ Methodology: The CE versus the PCE”

Characteristics of Top Spending Households Population

A snapshot of today’s top-spending furniture consumers looks to be high-earning married couples, in their late 30s and early 40s with young children, living in urban areas. Using data from the 2017 Consumer Expenditure Survey, this is the fourth factoid in a series of four factoids delving into key household characteristics – age, income, marriage/children status, occupation, population, and region.

Urban Population

Where people live also influences how much they spend on furniture each year. Larger cities seem to command the higher salaries, but also higher costs of living. Households in America’s mega markets with over 5 million in population, do not, in fact, spend the most on furniture. Bigger cities, but not the largest urban areas, with populations between 2.5 million and 5 million – had the highest annual furniture expenditures at $669 in 2017.

Although the larger, densely populated areas spend more per household, the greatest share of total furniture purchases, 21.7 percent, are from households living in mid-sized urban areas with a population of 250,000 to 999,999.

Source: Consumer Expenditure Survey 2017, Bureau of Labor Statistics, which in 2017 calculated at a ratio of .63 versus Personal Consumption Expenditures published by the Bureau of Economic Analysis (see methodology box below “ Methodology: The CE versus the PCE”

Characteristics of Top Spending Households Occupation Type

A snapshot of today’s top-spending furniture consumers looks to be high-earning married couples, in their late 30s and early 40s with young children, living in urban areas. Using data from the 2017 Consumer Expenditure Survey, this is the third factoid in a series of four factoids delving into key household characteristics – age, income, marriage/children status, occupation, population, and region.

Occupation Type

By far, managers and professionals, with their higher incomes, had the highest average annual expenditure at $740, 41 percent more than the second highest spender, construction workers and mechanics. Construction workers and mechanics spent an annual average of $523 in 2017, slightly more than self-employed workers at $516.

Not only do managers and professionals spend the most on furniture annually, this group also comprises a substantial portion of the U.S. workforce controlling 35.5 percent of total furniture expenditures. Retired Baby Boomers are second, with 16.9 percent of sales. The occupation category that controls the third largest segment of the industry - technical, sales and clerical workers – contains some of the lowest spenders per household at $476 annually; however, their sheer numbers put their industry presence at 13.8 percent of total dollars. Service workers, also among the lowest in expenditures at $407 still represent 10.5 percent of industry sales.

Source: Consumer Expenditure Survey 2017, Bureau of Labor Statistics, which in 2017 calculated at a ratio of .63 versus Personal Consumption Expenditures published by the Bureau of Economic Analysis (see methodology box below “ Methodology: The CE versus the PCE”

Characteristics of Top Spending Households Marriage and Children

A snapshot of today’s top-spending furniture consumers looks to be high-earning married couples, in their late 30s and early 40s with young children, living in urban areas. Using data from the 2017 Consumer Expenditure Survey, this is the second factoid in a series of four factoids delving into key household characteristics – age, income, marriage/children status, occupation, population, and region.

Marriage and Children Status

Marriage and children play a huge role in a consumer’s furniture buying needs. Typically marriage leads to buying a house and furnishings. When kids come along, households have furniture buying needs for years to come as families grow. Young married families starting out where the oldest child is under 6 had the highest average furniture expenditure at $886. These families, often dual-income earners, place a high priority on home furnishings. Most often this is their first home purchase. The next older cohort, married households with children between 6 and 17 years of age spend 12 percent less at $780 annually. At this life-stage additional family commitments begin to compete for household dollars – such as expenditures on school activities and sport, dental braces, teenage automobile costs, and private schools among higher income earners.

While married couples with the oldest child under 6 spent the most per consumer unit/household, this segment only accounts for 7.2 percent of the total furniture expenditures. If Millennials seriously start to embrace the traditional American Dream – get married, have children, and buy a house – it will be a huge boom for the furniture industry. Married couples without children appear to control the largest portion of furniture purchases at 32.3 percent while single consumer units without children spend 25.7 percent. Married couples with the oldest child over 18 only reflect 8.6 percent of furniture purchases as parents plan for the next life-stage – children in college.

Source: Consumer Expenditure Survey 2017, Bureau of Labor Statistics, which in 2017 calculated at a ratio of .63 versus Personal Consumption Expenditures published by the Bureau of Economic Analysis (see methodology box below “ Methodology: The CE versus the PCE”

Characteristics of Top Spending Households Age and Income

A snapshot of today’s top-spending furniture consumers looks to be high-earning married couples, in their late 30s and early 40s with young children, living in urban areas. Using data from the 2017 Consumer Expenditure Survey, this is the first factoid in a series of four factoids delving into key household characteristics – age, income, marriage/children status, occupation, population, and region.

Age and Income

Ages 35 to 44 spent an average of $663 per furniture expenditure in 2017 – the highest of the age groups. 54 percent of these older Millennials and younger Gen Xers are homeowners. Many older millennials are just now settling down, making more money, purchasing homes and buying furniture. Some of the younger Millennials (Ages 25-34) are also contributing to higher furniture expenditures. At an annual average of $538, ages 25 to 34 are spending more per purchase than ages 45 to 54 ($517).

Not surprisingly, consumers that earn more money tend to spend more on their furniture purchases. High income earners spent three-times to four-times the level of middle class house households in 2017. The jump among higher income households – those earning above $100,000 – is quite dramatic. Households with incomes between $150,000 to $199,999 spend an annual furniture expenditure average of $1,132 compared to $700 for those earning between $100,000 and $149,999 – a 61.7 percent increase.

Methodology: The CE versus the PCE

There are currently two U.S. Federal series of data that refer to household expenditures. One is produced by the Bureau of Labor Statistics, using the Consumer Expenditure Survey (CE), and the other is produced by the Bureau of Economic Analysis, Personal Consumption Expenditures (PCE). The information in the article reflects data from the CE. The CE is the only Federal household survey to provide information on the complete range of consumers' expenditures and incomes, as well as the characteristics of those consumers. It is published semi-annually with 2017 year end the most current. The PCE, which measures national consumer spending, is published monthly by the Bureau of Economic Analysis and is the main workhorse that drives economic growth. Much research continues to be done on the differences in the final estimates of consumer spending between the CE and the PCE. In terms of furniture expenditures the CE always reflects a lower average household expenditure which in 2017 calculated at a ratio of .63 versus the PCE.

Source: Consumer Expenditure Survey 2017, Bureau of Labor Statistics, which in 2017 calculated at a ratio of .63 versus Personal Consumption Expenditures published by the Bureau of Economic Analysis (see methodology box below “ Methodology: The CE versus the PCE”

Growth in Consumer Spending for Furniture and Home Furnishings Products

Consumer spending on furniture increased 7 percent last year outpacing the growth of all other broad home furnishings goods categories with sales of $114.6 billion in sales. Despite promising growth, all home furnishings goods continue to lose consumer dollars to spending on services including healthcare, rents and mortgages. This is the final factoid in a series of five factoids detailing consumer spending across all spending categories in 2018.

 Major household appliances is the second largest home furnishings spending category at $41.4 billion, followed by clocks, lamps, and lighting fixtures at $39 billion and televisions at $31.7 billion.

Although window coverings is the smallest of the home furnishings categories, it has experienced the largest post-recession surge in consumer spending – increasing 67.7 percent since 2007.

Spending on carpets and other floor coverings, the most affected home furnishings category, has slowly increased since 2012 but still shy of 2007 expenditures. As of November 2018, spending on furniture is 13.7 percent higher than pre-recession amounts in 2007.

All home furnishings categories except for televisions exceeded 3 percent average annual growth from 2011 to 2016. Spending on televisions had an average loss of (-0.2 percent) over five years but has rebounded slightly – increasing 4.3 percent last year. By far, furniture and window coverings have shown the most consistent growth from 2011 to 2018

Source: Personal Consumption Expenditures, Bureau of Labor Statistics *Seasonally Adjusted at Annual Rate (SAAR), 2018 through November

Industry Sales by Quarter2012 Q2 to 2019 Q2* Bedding Industry

Bedding sales in the second quarter of this year were impacted by a considerable slowing of imports. 2019 Q2 sales increased 1.6% growth compared to the same quarter last year. Sales of $3.71 billion were also down 9.7% versus 2019 Q1.

Bedding sales have struggled the last 9 quarters, and growth continues to be slow quarter over quarter. This comes in the midst of a general slowing of total furniture industry. The second quarter of this year grew 1.6% over the same quarter 2 in 2018. 

2019 Bedding sales for the first half of the year totaled $7.82 billion, up 2.4% over the first half of last year. 

Source:  Impact Consulting Services, Inc. industry model *2019 q2 is preliminary.

Industry Sales by Quarter 2012 Q2 to 2019 Q2 Furniture & Bedding

Following high growth in the furniture industry in first part of last year, the fourth quarter of 2018 softened, and that slowing has continued through the first half of this year. Combined Furniture and Bedding sales grew only 2.5% in the second quarter versus the same quarter in 2018. Compared to the previous quarter, 2019 Q1, second quarter sales were up 4.8% totaling $27.35 billion.

Furniture (excluding Bedding) in the second quarter increased 2.6% versus the same quarter 2 in 2018 reaching $23.64 billion. Compared to the first quarter of 2019, Furniture sales were up 7.5%.

On the heals of weaker imports, initial estimates indicate Bedding sales in the second quarter increased 1.6% compared to 2018 Q2 but were down 9.7% over the first quarter this year. Sales are projected to be $3.71 billion in Q2.

For the third straight quarter, growth in furniture and bedding industry sales has slowed. Compared to the same quarter of last year, furniture and bedding sales of $27.35 billion reflect an increase of 2.5% over 2019 Q1. Compared to the first quarter of this year sales are up 4.8%.

Furniture (excluding Bedding) increased 2.6% percent in 2019 Q2 versus the same second quarter of 2018 with sales of $23.64 billion. This figure is up 7.5% over last quarter, 2019 Q1.

Last quarter (2019 Q1) Bedding rebounded slightly up 3.1% compared to 2018 Q1. However slowing imports in the second quarter held growth to an early estimate of 1.6% compared to 2018 Q2 and a decline of 9.7% compared to the last quarter, 2019 Q1. Second quarter Bedding sales totaled $3.71 billion.

Industry sales for the first half of 2019 totaled $53.44 billion, an increase of only 2.5% over the same period last year, signaling a slowing of the industry for the third straight quarter.

Source:  Impact Consulting Services, Inc. industry model

 

Growth in Consumer Spending for Housing and Selected Household Expenditures

Overall, personal consumption expenditures have risen 41.6 percent post-recession with the majority of consumer spending – roughly two-thirds – absorbed by services and the amount increases every year. This is the fourth factoid in a series of five factoids detailing consumer spending across all spending categories in 2018.

Housing and Household Expenditures

Since the recession, renter-occupied housing has surged as the fastest growing housing expense – up 86.4 percent since 2007. Both household insurance and owner-occupied housing expenditures have also grown at a fast pace, increasing by 40.8 percent and 47.5 percent respectively. Major household appliances have shown steady growth, while televisions have fallen flat and outpaced by other household spending. Surprisingly, tools and equipment for house and garden have skyrocketed the last few years – jumping 43 percent since 2012.

As Americans are staying put longer, household maintenance spending has grown an average of 4.8 percent a year from 2011 to 2016. 2016 to 2017 saw a dip (-0.8 percent) in housing maintenance but the numbers picked back up last year – growing 3.8 percent. Last year, rents and mortgages both saw a high growth of 4.5 percent and 4.4 percent as supply continues to tighten in many areas. Furniture has shown the most growth over the past year, rising 7 percent after an average yearly increase of 4.6 percent from 2011 to 2016.

Source: Personal Consumption Expenditures, Bureau of Labor Statistics

Top Consumer Spending Categories

Overall, personal consumption expenditures have risen 41.6 percent post-recession with the majority of consumer spending – roughly two-thirds – absorbed by services and the amount increases every year. This is the third factoid in a series of five factoids detailing consumer spending across all spending categories in 2018. 

According to the government’s Bureau of Economic Analysis (BEA), Healthcare costs now surpass total housing expenditures at $3.10 trillion versus $2.98 trillion in 2018  and account for 22.2 percent of consumer spending.

The share for total housing and home furnishings has also increased slightly by 0.2 points, mainly due to rising rent and mortgage prices in a competitive housing market. Motor vehicles have dropped spending share by 1.2 points. Meanwhile Americans are eating out more, with corresponding spending on food/groceries consumed at home declining. In 2018, consumers are spending a greater share of expenditures on financial services – up 5.2 percent from 4.9 percent in 2013 .

Source: Personal Consumption Expenditures, Bureau of Labor Statistics

•Seasonally Adjusted at Annual Rate (SAAR), 2018 through November

 

 (1) Includes rents, mortgage payments, utilities, housing maintenance, insurance, all durable household and outdoor furnishings and tools.  Excludes nondurable household items and services including cellphone, internet, cable, and telephone services.

(2) Health care includes all out-of-pocket costs for health insurance, physicians, hospitals, outpatient facilities, nursing homes, etc. as well as prescription and non prescription drugs and medical equipment.

(3) Motor Vehicle Expense includes gasoline for vehicles, all new and used vehicle purchases, including motorcycles, vehicle leases, maintenance and insurance.

(4) Food/Groceries includes food and all alcoholic and non alcoholic beverages purchased off premise of personal consumption.

(5) Eating out includes all restaurant and fast food purchases.

(6) Financial service charges and fees, commissions, portfolio management, investor advice and planning, and other implied financial institution spending.

(7) Non-profit institutions serving households (NPISHs) provide goods or services to households.

(8) Other includes clothing and shoes, communication services and devices, professional services, social and religious, personal care, recreational items, transportation services, and household supplies. 

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