Five-year forecast: Major effort mostly blown away
Jerry Epperson -- Furniture Today, October 10, 2005
We released our latest five-year furniture forecast at the Las Vegas market. It had input from eight different sources, gave our expectations for furniture and bedding at retail, domestic factory shipments and imports, offered insights year by year, and presented our perspective on inflation, shifts in distribution and what is affecting our industry's competitive position vis-a-vis autos and other consumer expenditures. It was a lot of work. It took a lot of time.
It is completely worthless.
While we try to take comfort in the fact that everyone's forecasts have been negated by the horrendous damage done by Hurricane Katrina, that doesn't make revising the forecast any easier.
We feel tremendous sympathy for the human tragedy this natural disaster has brought, and feel a special loss for our furniture friends along the Gulf Coast, not to mention my niece in rural Louisiana. Our thoughts and prayers are with them all.
But what can the industry expect? How does this affect us in a year that was already quite challenging?
First, there has been the element of distraction as the chilling images streamed through our televisions and computers. No doubt this hurt our Labor Day weekend sales. The post-hurricane blame game is disturbing as well.
Second, there are the obvious and direct costs to businesses, like petroleum for fuel and components, the impact on interest rates, the re-routing of thousands of containers (especially in the peak period for Christmas holiday merchandise), and people who have been called by the National Guard or other groups to serve the needy.
Third, there is the direct impact of lost income, lost jobs, lost sales and lost lives in the Gulf area. The costs of moving residents to shelters around the country and providing the necessities is nearly immeasurable, and donations cannot cover it all, so everyone's taxes will.
In our opinion, the economic costs may not be fully realized for years and, of course, the personal losses can never be measured.
Our late-July economic forecast for furniture and bedding sales at retail was for a 2.6% gain this year, with a 6.3% increase expected in 2006, both less than the 6.8% gain in 2004. We now doubt that we will see any gain in 2005, but fully expect a stronger 2006 as spending in the wake of Katrina generates jobs, income and new housing.
Once again, our best wishes go to all the Gulf Coast residents (and the economists) so horribly affected by Hurricane Katrina.
