Industry operators are expected to focus on high-quality premium products
New York, NY (PRWEB) March 26, 2015
Revenue for the Household Furniture Manufacturing industry is expected to plummet over the five years to 2015. Rising external competition from household manufacturers in low-cost countries is anticipated to be the primary force behind the industry's decline. Industry operators in emerging markets, such as China, benefit from lower wage costs in addition to looser regulatory standards. Consequently, they have the ability to pass along these savings in the form of lower prices, stimulating demand from downstream markets. As a result of these trends, industry revenue is expected to fall in the five years to 2015.
According to IBISWorld Industry Analyst Brandon Ruiz, “international trade, particularly exports, is an integral component of the industry and is expected to remain so in the five years to 2015.” Industry operators are heavily reliant on US downstream markets, such as furniture store retailers and wholesalers. Due to the industry's reliance on trade, fluctuations in the value of the Canadian dollar impact industry demand. For example, as the Canadian dollar depreciates relative to the US dollar, household furniture manufactured domestically becomes more affordable, and thus, more desirable. Moreover, a depreciation of the Canadian dollar decreases domestic purchasing power, hampering demand for low-cost imports.
Despite these challenges, there are bright spots that will likely support industry revenue from falling further over the five years to 2020. For example, improvements in the housing market are anticipated to bolster furniture sales. Housing starts are expected to rise, which will cause many consumers to purchase new furniture to fill out their new homes. Moreover, disposable income levels are expected to trend higher, which will likely lift premium furniture sales. “To combat rising price-based competition, industry operators are expected to focus on high-quality products that sell at premium prices to compensate for their lack of price flexibility,” says Ruiz. Although positive industry trends exist, demand for low-cost imports is expected to remain strong. As a result, IBISWorld expects industry revenue to fall over the five years to 2020.
For more information, visit IBISWorld’s Household Furniture Manufacturing in Canada 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, theatres, cafeterias, schools and other facilities. Furniture may be made on a stock or custom basis and may be sold assembled or unassembled.
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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