This is a first in a series detailing how the projected shifts in population will determine the Furniture industry’s target customers in the next 5 to 10 years.
The children of the Baby Boomers, the Millennials, are entering their 30s and will slowly feed the furniture industry for the next 20 years. Not surprisingly, Baby Boomers turning 65 in the next 10 years will facilitate a dramatic increase in the 65 and over age group . Their growth will skyrocket 37.8% - increasing at a rate of 3.3% a year from 2015 to 2025.
Combined, the 25 to 44 year olds are projected to increase 10.4% over the next decade. Note that consumers ages 35 to 44 spend the most on home furnishings per household of any group.
Meanwhile, the tail end of the Baby Boomers , the 45 to 54 year olds, who have been the highest populated group over the last ten years, will now house much of the Baby Bust generation and are estimated to drop (-5.7)% by 2025. These high earning consumers have historically been key purchasers of upper and premium furniture. While projections for Ages 55 to 64 show a growth of 5.2% by 2020, these final Baby Boom numbers are expected to drop (-3)% by 2025.
The youngest segment, ages 15 to 24, is due to remain flat over the next five years and decline (-1.2)% by 2020.
*Source : U.S. Census Bureau, Projections of the Population of the U.S.
This is the fourth and last factoid in a series detailing demographic shifts over the next five and ten years that will impact the Youth Furniture industry.
A major factor in determining the future of the Youth Furniture market is the projected population of women of childbearing age. Are they increasing in number and are they having enough babies to support healthy growth in Youth Furniture sales?
While the crude birth rate (number of births per 1,000 women) continues to decline and is expected to drop (-3.2)% from 2015 to 2025, the population of women of childbearing age (18 to 44) is estimated to increase by 6.5% during the next decade – accounting for increases in projected births.
The number of women ages 35 to 44 is projected to increase by 12% in the next 10 years as the children of the Baby Boomers finally reach their prime furniture purchasing years. According to the National Center of Health Statistics, the number of first births to women 35 and over is nine times higher than in 1970. These women are delaying childbirth or having additional births well into their 30s.
Women ages 25 to 34 are also expected to increase in population – growing 7% over the next 10 years, while ages 18 to 24 is projected to decrease by (-1.2)% as the children of baby boomers begin to leave that age group.
Sources: National Center for Health Statistics and U.S. Census Bureau, Projections of the Population of the U.S.
This is the third in a series of factoids detailing demographic shifts over the next five and ten years that will impact the Youth Furniture industry. By studying population projections, the Furniture industry can better gage potential for Youth Furniture growth.
As shown in the second factoid of this series, the Under 5 Age Segment has the highest population bump in the forecast. By 2020, youth Under 5 will grow by 3% and 5.2% by 2025 – increasing from 20 million to 21 million.
Youth ages 5 to 9 are expected to grow 2.1% in 10 years. After a projected drop of (-0.9)% in 5 years, the Under 5 Age Segment will give this youth population a boost of 3% -- resulting in an estimated population of 20.9 million in 2025.
With an overall flat growth of 0.1% from 2015 to 2025, age group 10 to 13 shows signs of an initial slight increase of 0.8% by 2020, but is expected to fall (-0.7)% in the following five years. Continuing to decline, Age Group 14 to 17 is forecasted to decrease (-0.4)% in 2020 and another (-0.3)% in 2025.
The dismal population outlook for the two older youth segments can be attributed to a combined slowing of birth rates over the last five years caused by the Great Recession and the glut of the grandchildren of the Baby Boomers not yet reaching their teenage years. Looking past the next 10 years to the following decade (2025 to 2035), Ages 10 to 13 and 14 to 17 are both expected to grow over 4%.
Source: U.S. Census Bureau, Projections of the Population of the U.S.
This is the second in a series of factoids detailing demographic shifts over the next five and ten years that will impact the Youth Furniture industry. By studying population projections, the Furniture industry can better gauge potential for Youth Furniture growth.
The chart shows the Indexed Growth in the youth population by age range over the next ten years. Note that indexing is an effective way to compare growth rates (as opposed to size of the population). Looking at the youth population age segments, the group “Under Five Years” is projected to have the highest gains in population by 2025 – increasing 5.2%. This youngest age segment is expected to grow an average of 0.5% per year, while the three older youth age segments are projected to experience multiple dips and minimal growth in comparison.
Ages 5 to 9 are still reeling from the lower birth rate during the Great Recession and the group is expected to decrease by (-1.4)% from 2015 to 2018. Youth Under 5 will then begin to age into this group – causing an estimated increase of 4% from 2018 to 2025.
Over the next 10 years, both the tween and teenage groups are projected to diminish or remain flat. They will not pick up steam again until more than ten years out when an expected increase in birth rate and the migration of the grandchildren of the Baby Boomers into these age segments boost these tween/teens in the decades to come.
Source: U.S. Census Bureau, Projections of the Population of the U.S.
This is the first in a series of factoids detailing demographic shifts, especially over the next five and ten years, that will impact the Youth Furniture industry. Our factoid series starts with the history of U.S. births and projections into the future and will continue over the next few weeks with growth projections of the youth population by age group and growth projections by age group of women of childbearing age.
The number of births peaked in the U.S. in 1957 at 4.30 million babies and did not reach that number again until 2007 when births reached 4.32 million and started to decline. And although births are now on a slow rise, it will be another 30 years from now when births finally top the 4.3 million annual level again.
After a downward spiral of (-8.6)% from 2007 to 2010 during the Great Recession, births are projected to slowly grow an average of 1.4% every 5 years until reaching 4.34 million in 2045.
This slow but steady growth will increase the “Under 5” age group for decades to come while the older youth groups wait for these babies to filter into their age segments – ultimately spurring the need for youth furniture.
Sources: National Vital Statistics System, Center for Disease Control; U.S. Census Bureau, Projections of the Population of the U.S.
Due to strong sales in the first and third quarters, Bedding grew 5% over 2013 – totaling $12.62 billion in 2014. Bedding sales have risen a yearly average of 5.5% - growing 31% since the peak of the Recession in 2009. A big catalyst for increasing Furniture Industry sales, Bedding has grown from 14.9% of the total Industry in 2007 to 16.8% in 2014.
The chart above shows the performance quarter-to-quarter from 2011Q3 through the fourth quarter of 2014. While the Bedding Industry experienced its cyclical decline (-19.4)% over the third quarter in 2014, sales are up 3.4% over the fourth quarter of 2013. Overall, the Bedding Industry has shown positive growth in 2014 – up 5% from the previous year.
While the third quarter of 2014 experienced its traditional jump in sales, the fourth quarter slumped in comparison – down (-19.4)%. Although the Bedding Industry did decline over last quarter, it is up 3.4% over 2013Q4. Year-to-date, sales are up 5%.
The Furniture industry continued to grow in 2014 compared to 2013. Combined Furniture and Bedding sales totaled $87.5 billion – up 3.0% over last year. Furniture (excluding Bedding) increased by 2.7% from 2013 with sales at $74.9 billion and Bedding finished the year up 5% – totaling $12.6 billion.
The chart above shows the performance quarter to quarter from 2011Q4 through the fourth quarter of 2014.
Increasing from $21.6 Billion in 2013Q4, Industry sales were $22.5 Billion for the 4th quarter of 2014. Combined Furniture and Bedding experienced a jump of 4.0% in sales from 2013Q4 and 1.4% over 2013 Q3. The Industry finished 2014 up 3% over 2013.
Furniture (excluding Bedding) increased 4.0% with sales of $19.7 Billion in 2014Q4 – up from $18.9 Billion in 2013Q4.
Although Bedding experienced a cyclical drop in the 4th quarter (-19.4%) compared to the previous quarter, sales are up 3.4% over 2013Q4. Due to strong sales in the first and third quarter of 2014, Bedding sales totaled $12.62 Billion for the year – up 5% over 2013.