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ISPA cuts 2011 forecast to 1.7% unit growth

David Perry -- Furniture Today, November 5, 2011

ALEXANDRIA, Va. - Bedding units will post a modest 1.7% gain this year, while the dollar value of bedding shipments will rise by 6.2%, a new bedding forecast says.
     The forecast, issued by the International Sleep Products Assn., sees slower growth rates in 2012 but a stronger industry performance the following year.
     ISPA's Statistics Committee issues forecasts twice a year, relying on a number of economic projections and the insights of committee members. The new forecast is less bullish about business conditions this year than the one issued in May.
     In May, ISPA was forecasting 4% unit growth this year and a 7.5% increase in the dollar value of bedding shipments. The new forecast trims the unit increase by 2.3 percentage points and the dollar increase by 1.3 percentage points.
     Next year, the ISPA forecast says, bedding units will post just a 1% gain, with the dollar value of bedding shipments expected to rise by 4%. But 2013 will be a stronger year, ISPA says, with bedding units increasing by 2.5% and the dollar value of bedding shipments rising by 5.5%.
     The bedding industry's trade association noted that the industry is still struggling to regain ground lost during the recession that hit the industry.
     "Notably, 2010 marked the end of three consecutive annual declines in unit shipments," ISPA said in its new forecast. "Moderate unit expansion is expected over the forecast horizon. The 2013 value of mattress shipments will be only slightly below the 2007 levels, but the units shipped in 2013 will remain well below 2000 levels."
     Looking at the national economic picture, ISPA said that the economy "downshifted in the first half of 2011, taking an already sub-par pace of recovery to a crawl. The economy remains weak in the second half of 2011, but not as fragile as it was in the first half of the year."
     ISPA added, "The nation's fiscal outlook remains difficult to project."
     Jerry Epperson, a member of the ISPA Statistics Committee, shares "another perspective" on the forecast in a report issued with the ISPA forecasts.
     "We agree that a 1.7% unit increase and a 6.2% dollar increase for the entire year (in 2011) is reasonable," wrote Epperson, an analyst with Mann, Armistead & Epperson. "Could it be better? Yes, but it might not, so I see this as a logical expectation given the current economy, the global situation and, heaven help us, the overall lack of compromise, goodwill or new ideas from Washington."
     Epperson sees a number of possible scenarios for business next year, admitting there is a debate about how the year will play out.
     He noted that "a post-election 2013 is seen by several respected economists as a year of steady gains after extended uncertainty. Let's hope they are correct."

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