Political turmoil, natural disasters and depressing economic news have contributed to the ongoing decline of consumer confidence and industry sales in the second quarter of 2011. While industry sales are gradually declining since the third quarter of 2010, consumer confidence has decreased more dramatically and is the lowest it has been in a decade. Those not yet feeling the burdens are benefiting from the continuing industry consolidation.
From a national perspective, the Furniture Industry declined in the 2nd quarter with sales down 1.8% over the 1st quarter of this year and was flat compared to the 2nd quarter of last year (up only 0.4%). Measured and calculated decisions will be the deciding factors for those who survive these unnerving economic times.
The U.S. experienced a brief six-month recession in 2001. Prior to 2001 the recession of 1990–1991 was one of the longest in U.S. history – 16 months.
The current recession, which economists now say began a year ago, will be similar to the 1990–1991 downturn in that it is predicted to be long-lasting. However, it differs from the one 18 years ago in several respects relevant to the home furnishings industry.
- In the 1990–1991 recession, industry sales were strong right up to the abrupt downturn. In the current recession, growth slowed and sputtered starting in late 2006.
- The 1990–1991 recession developed more quickly than the current event. By the 2nd quarter of the 1990–1991 recession, furniture industry sales fell sharply declining 7.8% below the same quarter of the previous year.
- The current recession has developed gradually for the furniture industry with slow growth up to the actual negative downturn which for the furniture industry began at the end of the third quarter of last year. The downturn has also been gradual which for the furniture industry is now in its 6th quarter.