February 17,
2017 by Jane Chero in General 
This is the fourth factoid in a series of five factoids detailing the weakened 3rd quarter of 2016. The first quarter of 2016 in the furniture and bedding industry started off continuing the 5 percent plus growth over the previous year for all quarters in 2015. But as the year wore on, subsequent quarters did not perform to those levels. Quarter two fell to 3.7 percent growth and quarter three fell to 3.0 percent growth over quarter the same quarters of 2015. Year-end sales in 2015 totaled $92.5 billion. Third quarter year-to-date industry sales reached $71.5 billion, a 3.0 percent increase over the first three quarters last year.
The furniture industry, aside from demographics, is driven by economic influencers and catalysts. The previous two factoids detail two year quarterly growth of the Gross Domestic Product, Payroll Employment, and Consumer Price Index, Unemployment Rates and Consumer Confidence. The final two factoids will focus on quarterly growth of the Housing Industry and it’s tie into the Furniture Industry. Nothing impacts furniture industry growth perhaps more than home sales both existing and new.
Existing Home Sales. Home re-sales experienced healthy first and second quarters this year growing 5.0 and 4.2 percent from 2015. However, 2016 Q3 dropped 0.4 percent from 2015 Q3. At an annualized rate, third quarter existing home sales totaled 5.3 million units.
New Home Sales. Part of the third quarter decline in existing home sales this year is offset by new single-family home sales that surged 23.1 percent in the third quarter to an annualized rate of 599,000 units. After double-digit growth in 2015, 2016 year started with very slow growth in the first quarter of 1.6 percent. The second quarter rebounded, however, to 14.5 percent increase followed by the third quarter surge.
Source: *National Association of Realtors; **U.S. Census Bureau
February 10,
2017 by Jane Chero in General
This is the third factoid in a series of five factoids detailing the weakened 3rd quarter of 2016. The first quarter of 2016 in the furniture and bedding industry started off continuing the 5 percent plus growth over the previous year for all quarters in 2015. But as the year wore on, subsequent quarters did not perform to those levels. Quarter two fell to 3.7 percent growth and quarter three fell to 3.0 percent growth over quarter the same quarters of 2015. Year-end sales in 2015 totaled $92.5 billion. Third quarter year-to-date industry sales reached $71.5 billion, a 3.0 percent increase over the first three quarters last year.
The furniture industry, aside from demographics, is driven by economic influencers and catalysts. The previous factoid detailed 2 year quarterly growth of the Gross Domestic Product, Payroll Employment, and Consumer Price Index. This factoid focuses on possible influences of Unemployment Rates and Consumer Confidence.
Unemployment Rate
Over the last five years, the Unemployment Rate has declined rapidly – dropping from 9 percent to 5 percent. From 2011 to 2015, the third quarter each year has decreased an average of 1.0 percentage points. Although only slightly moving 0.2 percentage points from 2015 Q3 (5.2 percent) to 2016 Q3 (5.0 percent), employment is now at pre-recession levels.
Consumer Confidence
Consumer Confidence has not moved more than 6 points in any quarter over the last two years hovering from 95 to 101. A confidence level of 100 usually indicates neither extreme confidence nor lack thereof. The year 1985 was chosen by the Conference Board as the base index of 100 because that the year showed neither a peak nor trough in the business cycle. Consumer Confidence was at its highest in the year 2000 at 139. Conversely, Consumer Confidence was at its lowest of 39 at the bottom of the last recession in 2009.
Source: *U.S. Bureau of Labor Statistics; **Conference Boards Consumer Confidence Index, 2016Q4 includes only October
February 3,
2017 by Jane Chero in General
This is the second factoid in a series of five factoids detailing the weakened 3rd quarter of 2016. The first quarter of 2016 in the furniture and bedding industry started off continuing the 5 percent plus growth over the previous year for all quarters in 2015. But as the year wore on, subsequent quarters did not perform to those levels. Quarter two fell to 3.7 percent growth and quarter three fell to 3.0 percent growth over quarter the same quarters of 2015. Year-end sales in 2015 totaled $92.5 billion. Third quarter year-to-date industry sales reached $71.5 billion, a 3.0 percent increase over the first three quarters last year.
The previous factoid detailed quarter growth from 2015 to 2016 of Furniture Industry Sales, Furniture Store Sales, and Personal Consumption Expenditures. This factoid focuses on economic influences and catalysts: Real GDP, Payroll Employment, and Consumer Price Index.
Real GDP. The furniture industry, aside from demographics, is driven by economic influencers and catalysts. Gross National Product, the measure of goods and services in the U.S., is chief among them. Real GDP growth has continued to decline since the first quarter of 2015 when growth was at 3.3 percent. Growth in 2016 has been steady, but slow, with quarterly averages between 1.3 percent and 1.6 percent.
Payroll Employment. The number of employed workers (non-farm) was at its highest level in history in October 2016 at 149 million. However, employment growth this year has slowed throughout each quarter. In 2015 growth averaged 2.1 percent year over year, but has fallen to an average of 1.4 percent increase in October 2016.
Consumer Price Index. For furniture and bedding, prices have been relatively stable, falling less than 1 percent from the prior year’s quarter, until the second quarter of this year. In 2016 Q2 prices were down 2.8 percent and in 2016 Q3 down 3.1 percent.
Source: *Bureau of Economic Analysis, U.S. Dept of Commerce; **U.S. Census Bureau, Not seasonally adjusted, 2016Q4 includes only month of October; ***U.S. Bureau of Labor Statistics, Seasonally adjusted
January 27,
2017 by Jane Chero in General
This is the first factoid in a series of five factoids detailing a weakened 3rd quarter of 2016. The first quarter of 2016 in the furniture and bedding industry started off continuing the 5 percent plus growth over the previous year for all quarters in 2015. But as the year wore on, subsequent quarters did not perform to those levels. Quarter two fell to 3.7 percent growth and quarter three fell to 3.0 percent growth over quarter the same quarters of 2015. Year-end sales in 2015 totaled $92.5 billion. Third quarter year-to-date industry sales reached $71.5 billion, a 3.0 percent increase over the first three quarters last year.
These numbers reflect a weakening furniture store sales growth (which includes lifestyle retailers) and are in line with the government’s reports of personal consumption expenditures. Retailers are hoping for a bump in consumer confidence in the fourth quarter to help ramp up growth.
Furniture stores, which include all lifestyle furniture retailers, posted a dismal 1.3 percent increase in the third quarter of this year compared to the same quarter in 2015. Retail store sales are at an average quarterly growth of 3.2 percent – down from a 5.7 percent growth (2014 to 2015). Furniture Store sales increased from $14.3 billion in the second quarter of 2016 to $14.9 billion in quarter three, an increase of 4.3 percent.
Personal Consumption Expenditures for furniture also experienced a third quarter slump this year – increasing 2.1 percent over the same period in 2015. Over the previous six years, third quarter year-over-year growth averaged 4.4 percent. The next factoid will focus on Economic Influences and Catalysts.
Source: Impact Consulting Services, Inc., Furniture Core Industry Model; U.S. Census Bureau, Monthly Retail Trade Survey, 2016 Q3 July/August are actual – September has been estimated
January 20,
2017 by Jane Chero in General
This is the final factoid in a series of four factoids focusing on Generation X. Historically named the “Baby Bust Generation,” babies born between 1966 and 1981 are now 35 to 50 years old. Sandwiched between the Baby Boomers and Millennials, Generation X is often overlooked by media and marketers as a worthy target – instead focusing on upcoming Millennials and their future economic influence. Once considered too small in size to make an impact, Generation X is now almost 70 million strong and is the largest generation of consumers alive ages 21 to 65.
Homeownership: GenXers have followed the Baby Boomers in their love of homeownership but were temporarily stymied by the recession. Homeownership among all three GenX age is now well above 50 percent with 61.6 percent of 40 to 44 year olds owning a home and 68 percent of 45 to 49 year olds. With homeownership rates bouncing back, Generation X has dramatically increased furniture spending.
Furniture Expenditures: Last year saw a dramatic increase in furniture expenditures by GenXers according to the government’s Consumer Expenditure Survey. The heart of GenXers (ages 35 to 44) is spending the most on furniture of any consumer group averaging $672 annually. This survey reflects about 55 percent to 60 percent of furniture expenditures.
With the Baby Boomers aging out of prime buying years and the Millennials still pouring into adulthood, Generation X is the here now for the furniture industry. Industry leaders should keep their focus on this bread and butter generation that may just be the consumers that transition our industry toward real prosperity.
January 13,
2017 by Jane Chero in General
This is the third factoid in a series of four factoids focusing on Generation X. Historically named the “Baby Bust Generation,” babies born between 1966 and 1981 are now 35 to 50 years old. Sandwiched between the Baby Boomers and Millennials, Generation X is often overlooked by media and marketers as a worthy target – instead focusing on upcoming Millennials and their future economic influence. Once considered too small in size to make an impact, Generation X is now almost 70 million strong and is the largest generation of consumers alive ages 21 to 65.
These 35 to 50 year olds also have over 50 percent of the children under 18 – further extending their buying power. With homeownership rates up and furniture expenditures at their highest in years for ages 35 to 44, Generation X is poised to make a significant mark through over the next five years and beyond.
Children: GenXers ages 35 to 50 are in their prime family purchasing years for both themselves and their families. Over half (52.9 percent) of children 65.7 million children under 18 reside in GenXer homes. Over 80 percent of those Generation X households are married couples.
Education: GenXers are only slightly less educated than the younger Millennials with 35.7 percent attaining bachelor’s degrees or higher. For 35 to 50 year old GenXers, 38 million have some college of higher degree. The final factoid in this series will detail homeownership and furniture expenditures among Generation X.
Source: U.S. Census Bureau, America’s Families and Living Arrangements, Current Population Survey
January 6,
2017 by Jane Chero in General
This is the second factoid in a series of four factoids focusing on Generation X. Historically named the “Baby Bust Generation,” babies born between 1966 and 1981 are now 35 to 50 years old. Sandwiched between the Baby Boomers and Millennials, Generation X is often overlooked by media and marketers as a worthy target – instead focusing on upcoming Millennials and their future economic influence. Once considered too small in size to make an impact, Generation X is now almost 70 million strong and is the largest generation of consumers alive ages 21 to 65.
GenXers are in their prime earning years. As Baby Boomers retire more high paying jobs will open up to experienced and ready GenXers. In 2015, median income was the highest for Generation X 45 to 49 year olds at $76,095, followed by 40 to 44 year olds at $72,143. In addition, the youngest of the GenXers, the 35 to 39 year olds, had the fastest growing incomes last year with median income increasing 9.2 percent over the previous year. The next factoid focuses on the education and children of Generation X.
Source: U.S. Census Bureau
December 30,
2016 by Jane Chero in General
This is the first factoid in a series of four factoids focusing on Generation X. Historically named the “Baby Bust Generation,” babies born between 1966 and 1981 are now 35 to 50 years old. Sandwiched between the Baby Boomers and Millennials, Generation X is often overlooked by media and marketers as a worthy target – instead focusing on upcoming Millennials and their future economic influence. Once considered too small in size to make an impact, Generation X is now almost 70 million strong and is the largest generation of consumers alive ages 21 to 65.
At 69.8 million, GenXers trail behind both Millennials and Baby Boomers in size, but the current adult population of Generation X is higher than the Millennial’s 66 million as many are still under the age of 18. While GenXers are still smaller than the living Baby Boomers (74.9 million), they now have more buying power.
The population of the “Baby Bust Generation” is now much larger than originally projected due to immigration. With 58.5 million births between 1966 to 1981, Generation X has grown by almost 20 percent (19.3) in numbers. Although smaller in total population, GenXers are the largest adult consumer population at 37.5 percent of adults ages 21 to 65. The next factoid will focus on the income of Generation X as they enter their prime earning years.
Source: U.S. Census Bureau
December 28,
2016 by Jane Chero in General
Trends in New Home Building Multi-Story Houses and Outdoor Living
This is the fourth factoid in a series of six factoids detailing trends in new home building. New home purchases spur new home furnishings purchases like no other life event. As home building continues its slow but steady comeback from the recession, new trends in home building are emerging creating opportunity in many home furnishings product areas. According the new HUD report, single-family home building is up 23 percent since 2009 and for the first half of this year, new home completions are up 14 percent from the first half of 2015.
Trends include an increase in bigger multi-story homes with more bedrooms, baths, and multiple patios, porches and decks on increasingly smaller lots. Other trends point to the ballooning senior population downsizing to age-restricted communities with less interest in some design features such as fireplaces, but more interest in comfort features.
Multi-story new single family homes are on the rise with 63 percent built in 2015 versus 58 percent in 2009 . Partly due to declining lot sizes paired with desire for bigger homes, single-story houses were down to 37 percent of completions in 2015.
As outdoor living has become a major feature in many new homes, multiple porches, patios, and decks are trending for the larger homes– up to 46 percent in 2015 from 43 percent in 2010. The next factoid in this series will focus on laundry room placement, the number of fireplaces, and the presence of air conditioning in new home building.
*New single-family homes completed for sale
Source: U.S. Department of Housing and Urban Development, “Characteristics of New Single-Family Houses 2015”
Trends in New Home Building Laundry Rooms, Fireplaces, and Air-Conditioning Percent of Houses Built in Selected Years
This is the fifth factoid in a series of six factoids detailing trends in new home building. New home purchases spur new home furnishings purchases like no other life event. As home building continues its slow but steady comeback from the recession, new trends in home building are emerging creating opportunity in many home furnishings product areas. According the new HUD report, single-family home building is up 23 percent since 2009 and for the first half of this year, new home completions are up 14 percent from the first half of 2015.
Trends include an increase in bigger multi-story homes with more bedrooms, baths, and multiple patios, porches and decks on increasingly smaller lots. Other trends point to the ballooning senior population downsizing to age-restricted communities with less interest in some design features such as fireplaces, but more interest in comfort features.
As more new houses are being built with multiple stories, laundry rooms are moving out of basement and off the main floor and up to top floor (second floor).
In 2015, 29 percent new homes have top floor laundry rooms compared to 16 percent in 2009 – an increase of 81 percent.
A surprising trend especially given the increasing size of new homes is that fireplaces are becoming less important except in the Northeast. And while over half (51 percent) of the new homes being built still have fireplaces, this is down from 61 percent in 2002. In the Northeast fireplaces are still important – climbing from 62 percent of new homes in 2002 to 66 percent of in 2015.
Air conditioning is becoming the norm across the country with 94 percent of new homes built with AC in 2015 – up from 89 percent in 2002. The fastest increase in new houses built with air-conditioning has been in the Northwest and West – both jumping 10 percentage points from 2002 to 2015.
*New single-family homes completed for sale
Source: U.S. Department of Housing and Urban Development, “Characteristics of New Single-Family Houses 2015”
Trends in New Home Building
This is the final factoid in a series of six factoids detailing trends in new home building. New home purchases spur new home furnishings purchases like no other life event. As home building continues its slow but steady comeback from the recession, new trends in home building are emerging creating opportunity in many home furnishings product areas. According the new HUD report, single-family home building is up 23 percent since 2009 and for the first half of this year, new home completions are up 14 percent from the first half of 2015.
Trends include an increase in bigger multi-story homes with more bedrooms, baths, and multiple patios, porches and decks on increasingly smaller lots. Other trends point to the ballooning senior population downsizing to age-restricted communities with less interest in some design features such as fireplaces, but more interest in comfort features.
An important new trend in new home communities, especially in the South, is the increase in the number of age restricted developments (generally 55+). Although still less than 5 percent of new homes built in 2015, these neighborhoods have increased 54 percent from 2009 to 2015. The Midwest and South doubled construction in age restricted developments since 2009 while the Northeast declined 33.3 percent indicating seniors making this lifestyle move want to escape the colder climates. The West showed no growth. The growth in these age restricted communities may partially explain the decline in fireplaces in warmer climates as they become less important to seniors.
New single family houses are increasingly being built in communities with structured homeowners’ associations (HOAs), except in the Northeast. In total, new homes with HOAs jumped 11 percentage points from 2009 to 2015 – 62 percent to 73 percent. In the South these structured communities are especially important with 81 percent of new homes built in neighborhoods with an HOA. Meanwhile, in the Northeast in 2015, homes built in HOA communities represented only 40 percent of the region’s new construction.
*New single-family homes completed for sale
Source: U.S. Department of Housing and Urban Development, “Characteristics of New Single-Family Houses 2015”
December 16,
2016 by Jane Chero in General
This is the third factoid in a series of six factoids detailing trends in new home building. New home purchases spur new home furnishings purchases like no other life event. As home building continues its slow but steady comeback from the recession, new trends in home building are emerging creating opportunity in many home furnishings product areas. According the new HUD report, single-family home building is up 23 percent since 2009 and for the first half of this year, new home completions are up 14 percent from the first half of 2015.
Trends include an increase in bigger multi-story homes with more bedrooms, baths, and multiple patios, porches and decks on increasingly smaller lots. Other trends point to the ballooning senior population downsizing to age-restricted communities with less interest in some design features such as fireplaces, but more interest in comfort features.
As houses have increased in size, more bedrooms have become the norm. Over 53 percent of new single-family homes built in 2015 have four or more bedrooms – up from 38.2 percent in 2009. Three-bedroom homes, once the majority in new constructions, have decreased from 52.6 percent to 40.7 percent since the recession – a drop of 23 percent. Homes with more bedrooms create product opportunities, not only for bedroom furniture, but also home office or other alternative uses.
Along with more bedrooms, a big jump has occurred post recession in the number of bathrooms. The percentage of new homes with three baths or more grew by 105 percent – from 23.6 percent of new houses to 41.1 percent in six years. The next factoid in this series will focus on the number of stories and the increasing amounts of outdoor space.
*New single-family homes completed for sale
Source: U.S. Department of Housing and Urban Development, “Characteristics of New Single-Family Houses 2015”