Furniture imports rise 10% in first half to $9.3 billion

Thomas Russell -- Furniture Today, October 13, 2012

HIGH POINT - Furniture imports experienced a double-digit increase in the first half, a sign that bodes well for foreign producers seeking a boost from the U.S. market in 2012, including those that have seen their business prospects fade in Europe.
     Furniture/Today's research department calculates that shipments through June totaled $9.3 billion, up 10% from $8.5 billion from the first six months of 2011.
     China remained the top exporter to the U.S. market, with $5.7 billion in shipments the first six months, up 9%. India also scored a ranking in the top 10, due in part to a 33% increase that made it the fastest growing in the top 10. Its shipments rose to $88.5 million.
     Three other major Asian producers also had double digit increases, including Vietnam, which ranked in the No. 2 spot with a 26% gain; Malaysia at No. 5 with a 15% gain and Indonesia at No. 6 with a 13% gain.
     Taiwan was the slowest growing Asian producer in the Top 10, placing eighth with a 7% gain. Canada and Mexico ranked the third and fourth largest source countries, with respective gains of 3% and 27%.
     The figures could mark start of a turnaround from 2011, when full year import shipments fell 1% to $21.4 billion.
     But case goods companies that source in Asia aren't so sure. A number of companies said they don't see their categories experiencing the types of gains cited in the overall figures.
     Randy Chrisley, president and CEO of container direct case goods and upholstery resource Lacquer Craft USA, said he wasn't surprised too much by the overall gains, but didn't think that China would have seen 9% growth, particularly in case goods.
     "I have heard no one tell me that wood business is up (that much) so it has to be coming from across the board," he said, noting that most of the growth retailers seem to be experiencing is in upholstery sales.
     Others on the wood side of the business also were surprised at China's numbers.
     "China can be influenced by a Target or Ikea that is not mainstream furniture," said Lee Boone, president of case goods resource SLF, which sources its bedroom and some dining out of Vietnam, and sources some dining out of Malaysia and China. "I would be surprised if mainstream furniture is up out of China."
    In particular, he said, China has continued to face price pressures in areas ranging from labor to power to materials.
     "All costs out of China are higher than they were a few years ago," he said. "It has made most of the Chinese factories uncompetitive, and people have started to go to other countries."
     But Boone and others also were surprised at the growth of Vietnam.
    "Vietnam seems high to me," Boone said. "It is certainly more competitive, but mainstream furniture (out of Vietnam) has not enjoyed 26% growth."
     Richard Magnussen, CEO of Magnussen Home Furnishings, agreed that the numbers seem high, particularly for the wood sector of the business.
     "Generally, furniture seems slow in Vietnam," he said, noting that his year-to-date business is up about 14% from last year. "We are having some good business, but in general factories are concerned about the amount of (available) work. They are looking to us because Europe is soft."
     The figures do show that wood furniture has seen slower gains or in some cases decreases than other categories. For example, in China, wooden bedroom furniture shipments fell 16% during the period, a factor that is likely due to the ongoing imposition of duties on the category by the U.S. government in an effort to help level the playing field between U.S. manufacturers and foreign producers.
     Some of that business continues to shift to Vietnam, which saw a 32% gain in the category. Meanwhile its wooden dining table shipments saw a 47% increase during the period. By comparison, wooden kitchen furniture shipments fell by 5%.
     Mattress sales out of Vietnam rose 512% and rose 74% out of China during the same period, making them among the fastest growing categories and also helping skew the figures upward to some degree.
     The numbers also signal some continued weakness in the European manufacturing sector, with declines from two major European source countries. Poland ranked No. 9, just behind Taiwan, but its shipments dropped 22% in the first six months, while Germany at No. 12 saw its shipments fall by 7%.