Epperson calls for 1.7% rebound in shipments next year

Won't make up for this year's 7.2% decline, he says

Larry Thomas -- Furniture Today, November 7, 2008

HIGH POINT — Industry analyst Jerry Epperson has ratcheted back his forecast for the furniture and bedding business, calling for a 7.2% decline in shipments this year and a mild rebound of 1.7% in 2009.

It could be 2011 before U.S. industry shipments surpass the peak of $41.02 billion reached in 2006, said Epperson, managing partner of Mann, Armistead & Epperson in Richmond, Va.

Speaking at a financial management and economic outlook conference here sponsored by the American Home Furnishings Alliance, Epperson said he isn't looking for any improvement until the second half of '09.

"The second half of next year will be better because the second half of this year has been so miserable," he said.

He is projecting shipments of $37.3 billion this year - a 7.2% decline from 2007. And the $40.17 billion recorded in 2007 was a drop of 2.1% from 2006.

Epperson said he doesn't see a significant rebound until 2010, when he's forecasting shipments of $40.7 billion. For 2011, the projection is $42.64 billion.

The forecast is based on an economic model developed by University of Michigan economist Saul Hymans.

Epperson said the Hymans model predicts a steep 3% decline in the U.S. Gross Domestic Product in the current quarter and a more modest 1.5% decline in the first quarter of next year.

The second quarter of next year will be, in essence, a break-even quarter for the GDP, according to the forecast. Modest growth is expected for the third and fourth quarters.

In a forecast in June, Epperson had called for a decline of 4.1% in furniture and bedding shipments this year and an increase of 2.8% next year.