A recovery in the housing market will boost demand for new mattresses
Los Angeles, CA (PRWEB) January 12, 2013
The Mattress Manufacturing industry has lost some of its spring over the past five years due to the collapse of the real estate market and economic volatility. Like most producers of household goods, mattress manufacturers enjoyed high demand during the real estate surge until 2006, before a drastic downturn when the housing market crashed in 2007. “Because consumers generally purchase new furniture and household items when they move into new homes, activity in the residential real estate market directly affects household demand for mattresses,” says IBISWorld industry analyst Doug Kelly. As such, from 2007 to 2012, the real estate collapse that led to the recession contributed to revenue decline at an average annual rate of 2.5% to about $7.1 billion. In 2012, however, revenue is expected to increase 1.7% as disposable income slowly rises and residential housing picks up.
In addition to the unstable real estate market, mattress manufacturers have had to weather lower demand from hotels and volatile input material costs. To adapt to these changes, firms introduced new products and improved efficiency. Nonetheless, “the financial losses experienced by some mattress manufacturers were too steep to remain above water, and larger companies acquired these distressed enterprises,” says Kelly. “As such, industry consolidation has been in full swing, with the number of enterprises shrinking an estimated average 3.2% per year over the five years to 2012.” The trend is expected to continue over the five years to 2017. Market concentration is expected to increase slightly over the next five-year period, which will be attributed to several company acquisitions post the recession. The balance of the United States mattress market is fragmented with a large number of other manufacturers, many of which operate primarily on a regional basis. The highly competitive nature of the Mattress Manufacturing industry, along with an uncertain economic environment, will continue to place pressure on participants to develop new products to increase market share and to maintain profitability. Current major companies include Serta International, Tempur-Pedic International Inc., Sealy Corporation, Simmons Bedding Company and Select Comfort Corporation.
The industry is poised to benefit from the recovering housing market and increasing disposable income in the next five years, which will help boost consumer demand for mattresses. As the level of residential construction rises, homeowners will seek to replace or upgrade their existing household goods. Hotels and motels are also projected to purchase more mattresses as consumers increase their domestic travels. Although input material prices will likely remain high, they are expected to be less volatile than in the previous five years, allowing companies to better estimate production costs. For more information, visit IBISWorld’s Mattress Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Mattress Manufacturing industry produces mattresses and bases for retailers, wholesalers, consumers and the export market. The industry produces innerspring, box spring, and non-innerspring mattresses. Non-innerspring mattresses include waterbeds and beds made from rubber and latex. This industry does not include air mattresses.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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