Despite some evidence of reshoring, industry operators have suffered from import competition.
New York, NY (PRWEB) July 13, 2014
Two key features characterize the Outdoor Furniture Manufacturing industry: a high level of import penetration and low market share concentration. In 2014, imports are expected to account for 55.2% of domestic demand. Overseas manufacturers, particularly in Asian countries like China and Vietnam, can achieve operational efficiencies that US manufacturers find difficult to match. These efficiencies stem from lower wage costs and looser regulations in these countries. The savings realized through overseas production enable foreign producers to sell their goods at a lower cost relative to US outdoor furniture prices, making it hard for domestic manufacturers to compete. These trends have caused the number of industry participants to decline over the past 10 years. Despite post-recessionary economic recovery, this has not been enough to entice new entrants into the industry.
According to IBISWorld Industry Analyst, Daniel Carusotto, “Operators that continue to manufacture outdoor furniture in the United States are small enterprises that serve regional markets, with the average establishment employing 25 workers.” Establishments that have been able to survive have done so by serving niche markets; for example, industry player Poly-Wood Inc. manufactures outdoor furniture from recycled plastic, appealing to the eco-friendly consumer. However, on a broader scale, consumers seek the most affordable products; as a result, domestic manufacturers have found it hard to compete. Due to intense competition from imports, this industry has experienced rough times in the five years to 2014, with revenue falling an annualized 1.3% to $897.8 million, including a 0.8% decline in 2014.
“During the five years to 2019, prospects for industry growth remain bleak,” says Carusotto. While the industry does not suffer from a shortage in demand, challenges lie in the manufacturing of a quality product at a competitive price point. However, because the United States has the highest corporate tax rate in the world, expensive labor and extensive regulations, creating products domestically has become increasingly difficult. While the wage gap between US workers and Chinese workers has been shrinking, leading some reshoring advocates to claim US manufacturing will rise again, the evidence for this phenomenon remains largely anecdotal. The trend in trade data still favors foreign production.
For more information, visit IBISWorld’s Outdoor Furniture Manufacturing in the US industry report page.
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IBISWorld Industry Report Key Topics
This industry manufactures outdoor furniture such as lawn and patio chairs, picnic tables and patio umbrellas. Outdoor furniture can be made of various materials, including metal, wood and plastic. Items are designed to be placed outside the home. Furniture designed specifically for camping is excluded from this industry.
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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