Study Forecasts Canadian Household Furniture Growth

Furniture World Magazine

Research and Markets has just published a book that analyzes the economic and demographic forces impacting the demand for household furniture in Canada. The study is finely segregated by product categories and geographical regions. Forecasts are provided to 2015. The author of the book comes to some interesting and unexpected conclusions which need to be taken into account to gain a thorough appreciation of the present and future course of the Canadian furniture demand. Over the last two decades Canadian household furniture purchases increased from about $4,522 million in 1986 to $10,140 million in 2005, or more than two times Total annual sales since 1998 exceeded the 1989 pre-recession peak by a widening margin. Sales increased at an average annual pace of 4.8% between 1986 and 2005. The fastest pace was in the years 1986, and 2000 when growth exceeded 10% per year. The slowest pace was during the early 1990s. From 1997 through 2005 sales were brisk with annual gains in the 5.5% to 10% range each year. Average prices of household furniture went up by 34% between 1986 and 2005. The strongest inflationary pressure occurred prior to 1992. On the other hand, prices fell by a small margin in 1992 and - with the exception of 1999 - they barely increased since that year. The path of price change for the household furniture sector tends to mirror that for consumer prices overall, but - on average - furniture price increases have been of a lesser magnitude. Over the period from 1986 to 2005 household furniture spending measured in constant 1997 dollars increased from about $5,529 million in 1986 to $9,250 million in 2005 or 67%. Thus much of the growth in spending in current dollar terms over this period was due to the changes in prices. Over the period from 1986 to 1989 real spending on household furniture grew at a pace averaging close to 5% per year, though the rate from year to year varied significantly. Since 1997, the pace of real household furniture spending has been strong, ranging from 5.4% to 8.4% per year. Furniture sales in constant 1997 dollar terms in 2005 were 49% higher than they had been in 1989, the previous peak year for household furniture sales in Canada The Canadian market for household furniture is expected to continue to grow in the future for several reasons. Canada's total population will grow by 6.9% between 2005 and 2015 propelled mainly by a net in-flow of immigrants. Furthermore, the total number of households will grow by 12.3% over this period, or faster than the gain in population, reflecting a continued gradual decline in the number of persons per household due to the aging of the population. Thus, even if the amount spent on furniture per household was to hold steady in real terms at the $825 level of 2005 the furniture market would grow by 12.3%. After tax income is expected to grow in real terms by close to 16% between 2005 and 2015 reflecting three factors: output per worker growth exceeding 1% per year which supports real average wage gains of a similar amount over that period, a slightly rising ratio of employed persons per household reflecting the aging of society into the higher labor-force-participation-rate middle-age groups, and further slight declines in the personal tax load at both the federal and the provincial level in Canada. Together the above factors translate into an increase of 28% in real terms in the total market for household furniture in Canada between 2005 and 2015. In other words furniture sales in constant 2005 dollars are expected to reach a total of $ 12,979 million compared to $ 10,140 million in 2005. For more information visit http://www.researchandmarkets.com/reports/c36610