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What Malaysia's wage-hike means for pricing

January 22, 2013

Malaysia is a major producer of wood furniture. The United States imported close to $329 million in furniture from Malaysia in the first six months of 2012.

 

That more even than from Indonesia. Malaysia is an especially important source of casual dining furniture.

A major minimum wage law enacted last year took effect on January 1. The New York Times reported in May that the minimum wage was set at 900 ringgit a month, or $297.

 

Some reports we've seen say the average furniture worker before the wage increase was making about $180 a month. It's important to also keep in mind that the wages of in-country suppliers to these furniture factories will go up as well, amplifying its effect.

 

Furniture product costs may increase by 10%, according to some estimates, but I'm not quite sure how the overall price will be absorbed. Some factories have received three-to-six month deferments to begin paying the wages.

 

We'd like to find out if you're seeing any changes in pricing out of Malaysia. If you have any input, call me at (336) 605-1123 or drop me a line at hcombs@furnituretoday.com