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Andy Counts, President, AHFA

It’s not a secret that the American household furniture sector has seen rough times over the past few years, but an industry spokesman says the end of 2008 may show some gains.

Andy Counts, chief executive officer of the American Home Furnishings Alliance, is candid about the past and what’s in store in the future.

“2007 was a difficult year for the residential furniture industry with sales being down from 2006 levels,” says Counts. “We expect 2008 to start slowly with projected gains in the 4th quarter. The issues that caused a downturn in 2007 still exist with housing continuing to weaken and items impacting consumer confidence continuing to threaten the overall economy. Election year negativity will add to the slow recovery.”

Furniture manufacturers across the globe are faced with increasing raw material costs due to supply issues and petroleum-related cost increases, Counts says.

“We expect that many of these cost impacts will lessen as we approach 2009,” he says. “However, global supply chain issues will continue to place pricing pressures on the industry.”

These global pressures have resulted in a renewed interest in domestic manufacturing as many companies look to reduce their exposure, Counts says.
“Although imports continue to play a significant role in the industry, an increasing number of companies are working to blend more customized domestic product into their product lines. The April Furniture Market in High Point showcased several new American-made product lines.”

NEW REPORT

The Department of Commerce has released a new business census series on domestic furniture production, and the numbers are decidedly different from the last series released with 2002 shipment data.

A monthly series of domestic furniture shipment estimates from the AHFA has been benchmarked to the 2002 census numbers and updated regularly using the best available information from a sample of domestic furniture manufacturers. However, as a result of the new census data from the Commerce Department, the shipment results from 2002 through 2006 have been restated.

“Clearly these numbers are dramatically different, but they better reflect the changes the residential furniture industry has faced this decade, especially the severe downsizing of many furniture manufacturers, the closing of hundreds of furniture factories and the growing movement to sell imported furniture,” states Wallace W. “Jerry” Epperson, managing director at Mann, Armistead & Epperson, Richmond, Va.

The new census data shows a domestic wood furniture base of $8.5 billion for 2006, down from the $13.4 billion reported last year using the old series. Domestic upholstery shipments are also lower at $9.9 billion, rather than the $12.2 billion originally reported.

Using statistics from the International Trade Administration, residential wood furniture imports grew from $7.6 billion in 2002 to $10.8 billion in 2006, a 42.9 percent increase. In proportion to the new domestic shipment number, imports represented 63 percent of all wood furniture sold in the Unites States in 2006.

For upholstered furniture, total imports grew 94.8 percent from 2002 to 2006, to $3.1 billion. Against the restated domestic upholstery shipments, imports represented 28.5 percent of the U.S. market in 2006.

MEMBER SERVICES

As far as member services are concerned, Counts says the AHFA continues to move ahead.

“The AHFA is continuing to develop programs that leverage the buying power of the industry to provide costs savings,” he says. “In addition we remain the industry voice at the federal and state level on issues such as upholstered furniture flammability, formaldehyde standards, environmental issues and product safety. AHFA University webinars addressing various industry issues were attended by hundreds of industry professionals in 2007. These webinars are archived at http://university.ahfa.us.

“In 2007 we introduced the Sustainable by Design program that allows furniture manufacturers to demonstrate their commitment to sustainable business practices. Consumer demand for these types of products will only continue to grow, and AHFA members now have a vehicle to communicate to this audience.”

More information can be found at www.sustainablebydesign.us.