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Import growth slows to 1%

Thomas Russell -- Furniture Today, October 13, 2011

HIGH POINT - Furniture import growth slowed nearly to a halt during the first six months, another sign of the anemic economy's impact on consumer spending.
     According to data compiled by Furniture/Today's research department, residential furniture imports rose just 1% to $10.74 billion from $10.68 billion in the first six months of 2010.
     During the first six months of last year, furniture imports rose 18% from just over $9 billion the first six months of 2009.
     In 2011, China has remained the top producer with shipments of $6.27 billion for the first half, a 1% drop from $6.31 billion last year.
     It was followed by Vietnam, whose half-year shipments were flat at $790 million, and Canada, whose shipments to the U.S. market rose 4% to $679.4 million, from $655.9 million in 2010.
     Shipments from Mexico followed at $545 million, up 2% from $536 million in the 2010 first half.
     China's imports during the first half of 2010 had jumped 19% from the first half of 2009 and Vietnam's rose 29%. The slowdown can be attributed to a number of factors, from a lack of U.S. consumer demand to rising labor and materials costs affecting the overall pricing of goods coming out of those countries.
     Chinese furniture plants also have encountered some labor shortages, while Vietnam furniture plants have had their share of worker strikes.
     While shipments from Mexico and Canada were up slightly, their growth this year represents a big slowdown from the first half of 2010, when they were up 30% and 14%, respectively, from 2009.
     Of the top 10 exporting countries, Malaysia's 2011 shipments took the biggest hit on a percentage basis, falling 12% to $320.5 million from $365.8 million in the first half of 2010.
     Poland, meanwhile, was up 32% during the first half, with shipments of $164.5 million, compared to $125.1 million the same period of 2010. Germany shipped $109.8 million, up 16% from $94.6 million in 2010.
     Also placing in the Top 10 shippers during the first half of 2011 were Italy, Taiwan and Indonesia. Italy and Taiwan posted small gains, 1% and 5% respectively, while Indonesian shipments declined 3%.
     Indonesia was still the eighth largest source, however, with $265.7 million in first-half shipments. For case goods importers, Indonesia is an important alternative to China, thanks to its supply of indigenous hardwoods and local talent.

IMPORTS: 10 largest source countries of U.S. furniture imports, Jan.-June 2011
in millions of dollars
	2011	2010	% change from 2010
China	$6,266.1	$6,308.5	-1%
Vietnam	790.1	788.1	0
Canada	679.4	655.9	4
Mexico	545.1	536.1	2
Malaysia	320.5	365.8	-12
Italy	296.0	291.7	1
Taiwan	283.9	269.6	5
Indonesia	265.7	275.0	-3
Poland	164.5	125.1	32
Germany	109.8	94.6	16
WORLD TOTAL	$10,740.0	$10,678.7	1%

Top 10 furniture products shipped to the U.S., Jan.-June 2011
in millions of dollars
	2011	2010	% change from 2010
Misc. wood furniture	$1,751.8	$1,747.8	0%
Metal furniture & parts	1,024.5	1,014.1	1
Wood bedroom furniture	774.9	806.7	-4
Metal outdoor seats textile covered cushions¹	764.0	672.6	14
Upholstered seats, wood frame¹	741.1	806.9	-8
Upholstered chairs, wood frame	580.2	547.0	6
Misc. furniture parts	481.8	388.6	24
Wood furniture parts	431.7	429.0	1
Other seat parts^{1 2}	402.1	350.9	15
Wood beds	385.3	474.5	-19
WORLD TOTAL	$10,740.0	$10,678.7	1%

1. A "seat" is any product for sitting that is not a "chair." 2. Other seat parts may include some seat parts for autos and medical office furniture. 2010 six month figures are revised. Source: U.S. Customs Service, U.S. Census Bureau, U.S. International Trade Commission

     "They've got good lumber supplies and that helps," said Gene Clark, president of bedroom importer Ligna USA, whose Indonesian parent company and source factory uses Indonesian woods such as mindi and mahogany. "It is quality lumber."
     And unlike China, Clark noted that Indonesian factories don't have U.S. antidumping duties on bedroom, which can raise prices of some goods from China.
     Stanley Furniture also has been sourcing more of its wood line from Indonesia, including bedroom and formal dining. Adam Tilley, vice president of product management, said raw materials are one factor in its decision to source from Indonesia. He also said the country has a highly talented work force.
     "The Indonesian people I work with in the furniture business have a certain artisan quality to them," he said. "You still see that artisan quality in the Philippines and you can see a little bit of that same creativity in the Indonesian people, and that is exciting."
     He added that Indonesian vendors also are open to trying new things in product design.
     "Their first answer is, ‘Yes, let's give it a shot.' They seem to be very positive, optimistic and talented and artistic people, so it is not surprising to see things moving that way," he said.
     Vietnam also remains a key resource for many importers, such as Magnussen Home, which sources 100% of its bedroom line there.
     "Our relationships are pretty strong and stable," said Nathan Cressman, vice president of merchandising and sales. "From each others' perspectives, we are very meaningful to each other."
     "It's still our major place to source our case goods," he added, noting that the company also has a distribution center there that helps it stock goods and ship those goods quickly to U.S. customers.

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