|
This report
analyzes the economic and demographic forces impacting the demand for
household furniture in the United States. The study is finely segregated
by product categories and geographical regions. The author of the book
comes to some interesting and unexpected conclusions which need to be
taken into account to gain a thorough appreciation of the present and
future course of the American furniture demand. Forecasts are provided
to 2016.
The 2006 value of
the furniture market in the United States amounted to an estimated $84.5
billion measured at retail prices. Of this, 35.1% is upholstered
furniture, 30.4% is wooden case-goods (mainly bedroom furniture), 24.7%
is mattresses and foundations, and the remaining 9.8% is metal and other
furniture (mainly outdoor furniture).
Measured at
manufacturers’ prices domestic household furniture sales reached an
estimated $40.1 billion in 2006 or about 47.5% of the total dollars spent
by U.S. households on furniture. The $44.4 billion difference between
the prices received at the retail level and the prices received at the
manufacturers’ level represents a combination of transportation costs,
wages and other costs at the retail level, the retailer’s profit margin,
plus all sales taxes.
Over the last two
decades household furniture purchases increased significantly from $32.4
billion in 1986 to $84.5 billion in 2006, or 160%. In other words, sales
increased at an average annual pace of approximately 5.2% over this
period. Growth has been above this average in 2006, standing at a healthy
rate of 5.8%. Some of the growth during the past 20 years was due to
rising prices. If expressed in constant 2000-dollar terms, the increase
between 1985 and 2005 was 143%.
The number of
households in the United States will grow by about 13.8% over the next
decade (that is about 1.3% per year). This pace is a bit faster than the
7.6% pace for the total population. We expect real disposable income per
household will also increase by about 39.4% (or slightly more than 3.4%
per year) over that period. Thus total real disposable income will grow
by about 53.2% between 2006 and 2016.
Based on these
assumptions, we expect furniture spending growth to continue throughout
the projection horizon. However, it will decellerate from an annual real
rate of 5.6% in 2007 to 5.5% this year, and 5.5% next year. Thereafter,
it will further slow down to a rate of about 3.4% in 2016. Thus, real
household furniture spending - in constant 2006 dollars - will grow by
53.2% from $84.5 billion in 2006 to $129.4 billion in 2016. |
