New York, NY (PRWEB) October 06, 2014
Over the five years to 2014, revenue for the Household Furniture Manufacturing industry expected to trend lower. The rising prominence of import penetration, specifically from emerging economies (e.g. China), is expected to hinder growth prospects. These countries' low labor and overhead costs allow them to offer lower prices on comparable products, effectively eroding domestic demand for US-made products. With revenue tightening, household furniture manufacturers have either consolidated to minimize overhead costs or exited the industry by offshoring production. As a result of these trends, IBISWorld expects Household Furniture Manufacturing industry revenue to decline at an annualized rate of 2.1% to $20.3 billion over the five-year period, dragged down by an estimated 3.2% loss in 2014.
Consequently, industry profit margins are expected to suffer over the five years to 2014. Rising input costs, such as the price of sawmill lumber, are anticipated to weigh down profit margins. According to IBISWorld Industry Analyst Brandon Ruiz, “As the price of lumber trends higher, industry operators must pass along additional costs to downstream markets in the form of higher selling prices, which may deter demand, or absorb the costs themselves.” Due to rising external competition, particularly from operators in low-cost countries, price-based competition has significantly increased over the five-year period. As a result, industry operators are expected to increasingly absorb the rising cost of inputs, which is anticipated to negatively impact profit margins.
“Although demand for household furniture is anticipated to trend higher from a revival in disposable income and housing starts, industry operators will continue to face challenges over the next five years,” says Ruiz. The expected rise in disposable income and housing starts will cause demand for household furniture to grow in the short term, but the influx of low-cost imports is expected to thwart long-term growth prospects. Downstream markets are anticipated to increasingly purchase industry goods abroad to take advantage of lower prices.
For more information, visit IBISWorld’s Household Furniture Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Household Furniture Manufacturing industry manufactures a range of furniture for personal, household and public use. Public furniture is used for hospitals, theaters, cafeterias, schools and other facilities. Furniture may be made on a stock or custom basis and may be sold assembled or unassembled.
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