A tale of two forecasts: Will '08 be up or down?
David Perry, Executive Editor -- Furniture Today, February 3, 2008
This much is certain: Bedding will be up, down or sideways.
Bedding producers and retailers face some conflicting forecasts as they make their business plans for 2008. How will the industry perform? It depends on whom you ask.
The consensus bedding forecast recently issued by Furniture/Today calls for a 0.6% unit decline this year, with dollars forecast to grow by a modest 2.8%.
But a forecast issued by the International Sleep Products Assn. in October presented a more bullish view of 2008. That forecast calls for a 2% unit gain this year, with dollar sales growing by 5.1%.
Why the difference in the two forecasts? Part of the reason, industry insiders say, relates to timing: The ISPA forecast panel is composed of 10 producers, suppliers and analysts, who made their forecasts in September. But the Furniture/Today forecast sampled industry sentiments in November and December, when sluggish business in the fourth quarter soured the outlooks of many bedding producers. A total of 16 producers submitted forecasts to Furniture/Today, which weighted the forecasts based on the volume of the submitting companies.
ISPA said in its October forecast that it envisions "a slow recovery" during 2008, followed by "a substantial recovery" in 2009.
But bedding producers were more pessimistic about '08 prospects when they were surveyed by Furniture/Today late last year. Only three of the 16 producers predicted unit increases this year, while seven said units will decline in 2008. Six said that units will be flat this year.
The producers who responded to Furniture/Today were more optimistic about dollar growth. Three said sales will be flat with 2007, but 13 predicted dollar growth of anywhere from 1% to 8%.
The bedding executives on ISPA's forecast panel will issue a new forecast this spring. When the panel next meets in March, it will consider the latest shipment data, and other factors, in issuing an update.
ISPA releases two forecasts in the spring and fall, but Furniture/Today only makes one forecast for the year.
Another difference in the two forecasts is that ISPA looks beyond this year. While Furniture/Today's consensus forecasts covers 2008, the newspaper has no forecast now on 2009. That forecast will be issued in December.
But ISPA does have a prediction for 2009, and it is a bullish one. It calls for 5.1% growth in unit shipments of mattresses, with dollars forecast to rise by an even stronger 9%.
Contact David Perry at dperry@reedbusiness.com
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