U.S. furniture imports up 7% in 2006
Imports from China top $12 billion
Brian Carroll -- Furniture Today, March 20, 2007
HIGH POINT — Sluggish retail conditions and a good deal of reshuffling in where importers are sourcing their product kept growth in imported furniture and furniture parts in the single digits last year.
U.S. imports grew 7% to nearly $22 billion in 2006, up from $20.6 billion in 2005.
The still-healthy gain compares with an 11% expansion in 2005, which came largely because of China’s 18% surge. A year later, it was still China leading the way — managing an improbable 14% growth despite a mature industry, duties placed on wood bedroom furniture and Chinese government concerns about its record-breaking trade surpluses.
For China, gains in the world upholstery market are driving its growth, which spells bad news for other countries traditionally known for their upholstered goods.
Imports from China topped $12 billion, compared with 2005’s $10.6 billion total. China’s share means that of every dollar spent on imported furn­iture, nearly 55 cents goes to China. Last year was the first time China surpassed the 50% market share threshold for the United States.
China’s share is almost exactly 50% larger than the rest of the Top 10 source countries combined, which together totaled $8.1 billion in shipments last year.
There is every indication that China’s domination of U.S. furniture imports will only strengthen. According to early trade figures for 2007, exports of Chinese-made furniture to all nations are up 48% for the year’s first two months, part of an overall export surge of more than 41% for China during that same period.
A large part of the furniture increase early this year — a season when Chinese exports historically have lagged because of the weather — no doubt is in upholstery. Imported sofas and chairs, respectively, from China surged in 2006 by 43% and 34% from the previous year.
China clearly is taking share from other source countries, including Italy, Brazil and Argentina, as well as displacing domestic upholstery production. Italy, for example, saw its U.S. import share in upholstered sofas slip more than one-third. Italian-made chairs coming into the United States also were off sharply, down a fourth compared with 2005.
China’s torrid export growth is a concern both inside and outside China. The country’s $24 billion trade surplus in February will likely add to tensions with the United States and add to pressure on China to adjust the value of its currency, the yuan.
Elsewhere, there is apparent reshuffling taking place in sourcing. Canada, for so long the United States’ most important source for furniture, saw its total slip 4% last year to $2.5 billion. This was not a surprise; 2005’s total over the year previous showed only a 1% increase.
The realignment is also costing producers in Brazil, Thailand, the Philippines and Argentina. The surge in leather furniture from China has affected not only Italy, but also Brazil and Argentina.
Sourcing of wood furniture and parts in China and, even more dramatically, in Vietnam, is shrinking shares for Thailand and the Philippines, among others in Asia.
Vietnam’s numbers are enigmatic. The country’s total, still under $1 billion at $874.1 million, seems low. Vagaries in how the numbers are reported, particularly with transshipments going through Hong Kong and Singapore, may account for the low total. But significant regardless is the growth rate, which in 2006 reached 31%.
This decade, Vietnam has climbed from obscurity to become the United States’ fifth-most important trading partner in furniture. Factory expansions and startups, an ever more skilled work force, and a maturing transportation infrastructure have propelled Vietnam’s growth.
Easily the largest growth rate in the top 30 source countries, Vietnam’s increase still was a shadow of its spike in 2005, however, when an eye-popping 85% jump over 2004 signaled the country’s arrival as an offshore mainstay for the U.S. market.
While Vietnam’s future looks bright, Italy’s is unclear. In 2005, displacement of sourcing of upholstery production by China reversed Italian manufacturers’ fortunes vis-à-vis the U.S. market. On the heels of 2005’s 2% drop, Italy in 2006 saw its U.S. imports tumble 14% to dip below the $1 billion threshold.
Italy’s total in 2006 reached $994.8 million, meaning that Vietnam and Italy likely will change places this year. After decades of a steady U.S. appetite for Italian-made leather upholstery and formal dining room, the decline represents a startling change in fortunes.
Mexico, the United States’ third-most important import source, held its ground last year for a second consecutive year of modest growth. The 2% gain last year followed a 5% increase in 2005, and it put Mexico’s total at just less than $1.2 billion. A 9% increase in upholstered seating more than compensated for Mexico’s losses in occasional furniture and furniture parts.
Not all Asian sources fared well. While Vietnam and Malaysia enjoyed sizable gains, for example, Taiwan, Thailand and the Philippines were down. With a 9% decrease last year over 2005, Taiwan continued its descent down the Top 10, in 2006 switching places with Indonesia.
Just beyond the Top 10, the big regional winner in 2006 was Europe. No. 12 Germany, No. 13 Austria, No. 14 France, No. 15 United Kingdom and No. 16 Denmark all posted gains, with France improving the most dramatically. French-made product coming into the United States totaled $132.9 million in 2006, up almost one-fourth over 2005. Germany and the United Kingdom also posted double-digit increases in shares.
Despite the euro’s strength against the dollar — which could hold down their export sales — German manufacturers at the Cologne International Furniture Fair in January were bullish on 2007, a refreshing confidence given the retail doldrums in the United States. Germany’s export growth to the United States last year more than doubled its domestic industry growth rate of 5%.
“The German economy is good, and the French market is very good,” said Juergen Hopf, a spokesman for contemporary specialist Rolf Benz.
An examination of the import numbers by product category reveals some interesting trends.
Perhaps the most important is the double-digit growth in upholstered furniture categories almost across the board. Sofas and chairs were up, respectively, 15% and 16%. These increases pushed these two categories up the Top 10 list, displacing parts categories, to reveal another important trend — the surge in imports of finished furniture compared with furniture parts.
The largest category remained miscellaneous wood (mainly occasional) furniture, which grew 4% in 2006 to $4.6 billion. No. 2 wood bedroom furniture, for so long a growth category, appears to be maturing. Last year’s increase to $2.1 billion represented only a 2% bump.
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