Furniture spending dips to 10-year low
By Jay McIntosh -- Furniture Today, September 23, 2001
HIGH POINT — As a percentage of total U.S. consumer spending, furniture has dipped to its lowest point in at least a decade.
Of every $100 spent on all goods through the first seven months of this year, 91 cents went to furniture. That's down from 95 cents for the full year 2000 and is the smallest share since before 1990.
Estimates from the U.S. Department of Commerce show that through July, U.S. consumer spending on furniture was running at an annual rate of $63.9 billion, down 0.4% from the full-year total in 2000. At the same time, spending on all goods was running 4.4% ahead of last year, at a rate of $7.02 trillion.
The rate of furniture as a percentage of the total — furniture's "market share" among consumer goods — stayed within a range of 0.95% to 0.97% from 1993 through 2000.
If sales pick up this fall, the share for this year might recover. But if it stays at its current level, it won't be the first time it has taken a dive. From 1990 to 1992, during the industry's last recession, the rate dropped from 1.01% to 0.94%.
One reason for this year's decline could be the troubles at some big retailers, such as Montgomery Ward and Heilig-Meyers, which have taken sales out of the market that other retailers haven't had a chance to recover yet.
Home sales have held up well this year, however, which offers hope that demand for furnishings has continued to build and will bolster industry sales in the months to come.
One wild card is the aftermath of the Sept. 11 terrorist attacks and any counterattacks, or a prolonged war posture by the United States.
"The near-term hit to consumer confidence will likely have a negative effect on all consumer spending," said Cody McGarraugh and Cynthia Cox, analysts for Stifel, Nicolaus & Co., in an investment update issued after the attacks. "However, durable goods, which tend to be a postponable purchase, will likely be hardest hit both near-term and intermediate-term."
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