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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

Consumer Confidence Drives Consumer Spending Consumer Confidence Index 2007 to 2015 YTD (Annual Average)

This is the first in a series of four factoids exploring the impact of consumer confidence on a rising demand for consumer products, especially durable goods. Consumer confidence, measured monthly by The Conference Board, is “a barometer of the health of the U.S. economy from the perspective of the consumer”. With a surge in Housing Starts, flattening of home electronics, and possible waning of new automobile sales, the Furniture Industry should benefit with the rise of confident consumers. 

About 70% of the Gross National Product is consumer spending, and one of the prime drivers of spending is Consumer Confidence. The Consumer Confidence Index increased to 103.0 in September, up from the 2015 low in July of 91. The all-time low in confidence occurred in February 2009 when it fell to a recession low of 25.3.  (Source: The Conference Board, Consumer Confidence Index)

Consumer Confidence took a nosedive after a high of 103.4 in 2007 – dropping to an average of 45.4 in 2009. Since the Great Recession, confidence in the economy has steadily increased a yearly average of 9 index points – resulting in a total jump of 53.3 points from 2009 to 2015 year to date (annual average).

Next week’s factoid will show the tie between Consumer Confidence and Employment and how the health of the U.S. job market affects the Consumer Confidence Index.

Imports Still Growing as China Devalues Yuan: Imports of Household Furniture, Imports of Wood and Upholstery, U.S. Exports by Top 3 Countries 2002 to 2015Q2

Total U.S. Imports of Household Furniture by Country 2002 to 2015 YTD


While the furniture industry in China has been threatened over the past few years due to rising labor costs and labor shortages, U.S imports continue to increase from China alongside a growing Vietnam Wood manufacturing presence. The recent devaluing of the Yuan could go a long way to strengthen China’s hold on U.S.  

China’s exports to the U.S. have grown to over 60 percent of total U.S. imports – up 20.6 points from 2002 to 2015 Q2.  Since the peak of the recession in 2009, the value of imports from China has grown 52.4 percent to $14 billion.

Most noticeable is Canada’s decline alongside Vietnam’s rise. Vietnam jumped from a half percent to over 10 percent of U.S. imports in the past 13 years while Canada has dropped from 18.3 percent in 2002 down to 5.5 percent in 2015 Q2 – a decline of 12.8 points. As the fourth largest importer, Mexico accounts for 4.8 percent of total imports in 2015 Q2 – 0.8 points shy of 2002.



Imports of Wood and Upholstery Household Furniture by Country in Selected Years (Top 4 Countries)


While the furniture industry in China has been threatened over the past few years due to rising labor costs and labor shortages, U.S imports continue to increase from China alongside a growing Vietnam Wood manufacturing presence. The recent devaluing of the Yuan could go a long way to strengthen China’s hold on U.S.

Wood household furniture imports totaled $9.8 billion in 2014 and are up 10 percent in the second quarter of this year compared to 2014. China still commands the Wood category at $3.7 billion wholesale in 2014, but has lost significant share over the last ten years to Vietnam.

Vietnam’s 2014 imports have grown to $2.2 billion, up from only $60 million in 2002. Through the second quarter of this year, China’s Wood imports have grown only 7.0 percent compared to Vietnam’s 23.9 percent, closing the gap even further. Malaysia continues a steady Wood niche but controls less than 6 percent of Wood imports.

Unlike the Wood category, China has virtually no competitors in Upholstered goods in the U.S. marketplace. In the early 2000s China began to make its move with Upholstery imports of only $543 million in 2002 and grew to $3.9 billion by 2014. Essentially China has taken market share from U.S. producers as the secondary countries – Mexico and Canada – have struggled just to maintain shipment levels. Through the second quarter of this year, China upholstery imports are up another 15.2 percent over the same period last year. Vietnam has slowly tried to enter the U.S. Upholstery market, but had only grown to $293 million in 2014.

Source: U.S. Census Bureau, Foreign Trade

 

Total U.S. Exports by Top 3 Countries 2002 to 2015Q2

Although the United States exports a fraction of furniture compared to imported goods, exports have continued to rise since 2009 and surpass the peak highs of 2007. Well over half of the $3.4 billion in U.S. exports are to Canada. Mexico has steadily increased as the second largest importer of U.S. furniture – up 92% from 2002 to 2014. In the last 13 years, China has gone from 0.7% of total U.S. furniture exports to 3.6% in 2015Q2.

Although exports have been growing, they are not approaching the growth in imports being fueled by China.  And while the furniture industry in China has been threatened over the past few years due to rising labor costs and labor shortages, U.S imports continue to increase from China alongside a growing Vietnam Wood manufacturing presence. The recent devaluing of the Yuan could go a long way to strengthen China’s hold on U.S.

Source: U.S. Census Bureau, Foreign Trade





 

Industry Sales by Quarter 2008 Q3 to 2015 Q3 Bedding Industry

Bedding sales grew to an estimated $3.69 billion in the third quarter, increasing 5.3 percent over the same Q3 last year.  Compared to the previous Q2 of this year, sales were up 9.2 percent.  Year-to-date, the bedding industry is 6.3 percent higher than the first three quarters of last year.

Note: Previously issued 2015 Q2 estimates have been revised.


Industry Growth Quarter to Quarter 2011 to 2015 Q3 Bedding Industry


Bedding sales continue to show steady improvement quarter over quarter for the last ten consecutive quarters. In the third quarter of this year sales totaled $3.69 billion, up 5.3 percent over quarter three of 2014. 

Note: Previously issued 2015 Q2 estimates have been revised.


Industry Sales 2007 to 2015 Q3 Bedding Industry


Third quarter year-to-date bedding sales totaled $10.45 billion, up 6.7 percent compared to the same period last year.

Note: Previously issued 2015 Q2 estimates have been revised.


 

Industry Sales 2007 to 2015 Q3 YTD Furniture & Bedding

Third quarter year-to-date furniture and bedding sales totaled $68.59 billion, an increase of 5.4% over the first three quarters of last year.


Industry Growth Quarter to Quarter 2011 to 2015 Q3 Furniture & Bedding

Note: Previously issued 2015 Q2 estimates have been revised.

Source:  Impact Consulting Services, Inc. industry model.

The chart above shows quarter-over-quarter industry performance from 2012 Q3 through the third quarter of 2015.

Third quarter combined Furniture and Bedding industry sales of $23.32 billion were a 5.2 percent improvement over the same Q3 in 2014. Compared to last quarter (2015 Q2) sales improved 1.3 percent

Furniture (excluding Bedding) increased 5.18 percent in 2015 Q3 versus the same quarter last year with sales of $19.62 billion – up from $18.66 billion in 2014 Q3.

 Bedding continued steady quarter-over-quarter growth with sales of $3.69 billion, up 5.3 percent over third quarter sales last year.



Industry Sales by Quarter 2008 Q3 to 2015 Q3 Furniture & Bedding

Note: Previously issued 2015 Q2 estimates have been revised.

Source:  Impact Consulting Services, Inc. industry model.


The Industry continued its steady growth in the third quarter increasing 5.2 percent over the same quarter last year. Furniture and Bedding sales totaled $23.32 billion in Q3 which was 1.3 percent over the second quarter of this year.

Furniture (excluding Bedding) increased 5.18 percent over 2014 Q3 but was essentially flat over last quarter (2015 Q2). Bedding sales were also up 5.3 percent over Q3 of last year and grew 9.9 percent compared to the previous quarter (2015 Q2).


Imports Still Growing as China Devalues Yuan: World Dollar Totals of U.S. Household Furniture Imports and Exports by Selected Years

Can China’s currency devaluation impact the U.S. furniture industry? Although economists differ on how much the impact will be; China hopes to prevent its economy from slowing further by making its exports less expensive. China already dominates 60.8 percent of household furniture imports to the U.S. and cheaper imports could strengthen that hold.

The world totals of both U.S. imports and exports in the household furniture industry have been on the rise since the Great Recession. In 2014 imports totaled $23.8 billion at wholesale or about 74 percent of U.S. furniture and bedding consumption - this compares to 62 percent in 2007.

Imports to the U.S. experienced high growth (53.6 percent) from 2002 to 2007 before plummeting 24.3 percent by 2009. Since 2009, furniture imports increased to 53.1 percent in 2014 – growing an additional 10.9 percent from 2014 Q2 to 2015 Q2 year to date. And while U.S. exports total just a fraction of imports, exports of furniture have been steadily increasing since the peak of the recession in 2009. Up 50.1 percent since dropping 5.9 percent in 2009, the furniture export industry has increased from $1.5 billion in 2002 to $3.5 billion in 2014 – a jump of 141 percent.

Methodology:  Household furniture imports and exports are compiled by the U.S. Census Bureau, Foreign Trade Division from over 200 countries by product type and material.

Source: U.S. Census Bureau, Foreign Trade


The Housing Market through the Recession to Today: Index Growth of New Home Sales, Existing Home Sales, and Furniture Sales 2007 to 2014

This is the final factoid in a series of five factoids detailing the Housing Market’s recovery from the Recession and the potential for growth in both the Housing and Furniture Industries.

As the Housing Market took a nosedive during the Recession, Furniture Sales suffered greatly and both industries are working their way back to pre-recession levels. Furniture Sales hit bottom in 2009 – dropping 17.4 percent from 2007. Although growing 18.1 percent from 2009 to 2014, sales are still 2.5 percent shy of 2007 total sales.

Existing Home Sales are back to pre-recession levels – up 1.9 percent from 2007. New Home Sales are taking longer to recover – down 33.4 percent, most likely due to low inventory and cautious homebuilders. As Millennials age out of their late teens and early 20’s (renting years) and pour into their 30’s (home buying years) over the next decade, a need for new homes will grow alongside a need for new furniture.

Source: U.S. Census Bureau

The Housing Market through the Recession to Today: Owner Occupied Housing Vs. Rental Occupied Housing 2007 to 2015 YTD

This is the fourth factoid in a series of five factoids detailing the Housing Market’s recovery from the Recession and the potential for growth in both the Housing and Furniture Industries.

This factoid shows how the economy, housing bust, and changing demographics have affected the ratio of owner-occupied housing units versus rental-occupied housing units. The increase in rentals since 2007 has shifted the breakdown of housing units by 4.6 points – increasing Rental-Occupied to 36.5 percent of total units and decreasing Owner-Occupied to 63.5 percent in 2015 year-to-date. 

Source: U.S. Census Bureau


The Housing Market through the Recession to Today: New Home Sales and Housing Starts


 

This is the second in a series of five factoids detailing the Housing Market’s recovery from the Recession and the potential for growth in both the Housing and Furniture Industries. As a whole, the Housing Market has made great strides in the last few years to recover from the Great Recession.

 

While Existing Home Sales were hit hard by the Recession, Housing Starts and New Home Sales both took staggering dives after 2007. New Home Sales plummeted 60 percent from 2007 to 2011. Sales have climbed a yearly average of 13.9 percent since bottoming out– totaling 512,000 in 2015. Although New Home Sales grew 67.3 percent from 2011, they are still 33 percent below the 2007 total of 769,000.

 

Like New Home Sales, Housing Starts have not caught up to 2007 levels mainly due to lack of inventory and cautious builders. After 2007, Housing Starts began falling 58.7 percent before hitting bottom in 2009. From 2009, Starts have increased 91.5 percent, but are still 20.9 percent below the peak of 2007.




Source: U.S. Census Bureau


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