US furniture trade accelerating

Source:
ITTO
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US year-to-date furniture shipments were 4% higher in the first half of 2014 compared to 2013. Almost 70% percent of companies reported higher year-to-date shipments in June. Inventory levels at distributors and manufacturers increased more than orders and shipments. June furniture inventories increased by 9% from the previous month.

The higher inventories may be due to summer holiday shutdowns, or because furniture retail sales appear to lag manufacturing and imports.

New furniture orders grew by 5% in the first half of 2014 compared to the same period last year. Smith Leonard's furniture survey found that about 60% of companies had higher orders in the first half of 2014.

Furniture retail sales trends positive

The outlook for the 2014 furniture market remains positive, despite the slow growth in furniture retail sales. GDP growth has picked up as expected by analysts. On the down side, unemployment remains relatively high and consumer confidence is still not very strong.

However, the growth in housing starts and home sales should support demand for furniture in the second half of 2014. Furniture sales (excluding home furnishing) grew by 6% in July to US$4.4 billion.

Growth in domestic furniture and wood product manufacturing

Economic growth in the second quarter of 2014 was revised upward to 4.2% in the second estimate by the US Department of Commerce. In the first quarter, real GDP decreased by 2.1%.

The manufacturing sector grew again in August, according to the Institute for Supply Management. Both furniture and wood product manufacturing reported growth in August. Labour availability is a challenge for some furniture producers.

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