AFMA Predicts 6.7% Decline In Industry Shipments For 2001,Increase Of 3.6% For 2002

Furniture World Magazine

Furniture shipments are projected to decrease 6.7% in dollar value this year, but achieve a stronger performance next year, with shipments increasing 3.6% to $24.727 billion in 2002, according to the just-revised Economic Forecast of the American Furniture Manufacturers Association. This year, manufacturer shipments are expected to total $23.862 billion, the new forecast shows, down from $25.579 billion in 2000. "There is no question that 2001 has been a tough year for the furniture industry, as it has been for the U.S. economy in general," said Joseph P. Logan, AFMA's vice president of financial services. "But the good news is that we do not see this as prolonged weakness for the industry. We fully expect to see a turnaround in the fourth quarter of this year and continually improving conditions next year." Logan pointed to a volatile stock market, weakened consumer confidence, high debt levels and rising unemployment as contributors to the decline in furniture sales. "Unfortunately for us, furniture is a high-ticket item that is generally a postponable purchase when the consumer is feeling uneasy," he said. "But we think that as the overall economy improves later this year, we will begin to see consumers more interested in buying furniture." Consumer furniture demand is forecast to be at the $62.879 billion level this year, a decline of 3.0% over 2000. A rebound to $65.330 billion is projected for 2002, a 3.9% increase over this year. This year, AFMA expects wood furniture shipments to decline 9.1 %, reaching $11.093 billion, then rise 4.4% to $11.582 billion in 2002. Shipments of upholstered furniture are expected to total $10.349 billion in 2001, down 4.7% from 2000. In 2002, an increase to $10.678 billion is expected, growth of 3.2% over the previous year. The AFMA econometric model of the furniture industry is based on the current economic outlook for the U.S. economy, which is prepared by the Research Seminar in Quantitative Economics at the University of Michigan. Logan noted that a number of factors are coming together that point to a more positive outlook for the furniture industry. Among these factors are President Bush's tax cuts, along with the rebate checks that are now starting to arrive in taxpayers' mailboxes, lower interest rates, a more stable stock market and falling energy prices. "With all these factors coming together, we should soon start seeing consumer confidence rising, which will lead to stronger furniture sales," Logan said. The American Furniture Manufacturers Association is headquartered in High Point, N. C - the furniture capital of the world - and represents more than 350 leading U. S furniture manufacturers. These manufacturers represent a total of 150, 000 employees and more than 75% of U.S. furniture shipments.