Furniture Manufacturers NAICS 3371, 3372

Jan 22, 2026 - Upholstery Manufacturing Faces New Automation Push

• Automation may begin to reach one of the US furniture manufacturing industry’s most labor-intensive segments, upholstery, as startup Kathedra pilots AI-driven robotics with a High Point manufacturer, according to a report in the Business of Home. The company has raised $235,000 to develop a robotic cell designed to automate non-value-add upholstery tasks, addressing a persistent skilled labor shortage as much of the workforce nears retirement. The technology aims to improve efficiency and allow artisans to focus on higher-value craftsmanship. The initiative could be significant for domestic manufacturers, particularly in North Carolina, where Kathedra plans to initially target roughly 100 producers. Larger companies such as Ethan Allen maintain US upholstery operations, underscoring the potential impact. While automation has already attracted millions of dollars in investment at firms like Rowe, upholstery remains challenging due to a broad, complex product range, including 1,100 fabrics, 2,800 SKUs, and 10% fabric turnover every six months.
• As the US housing market enters 2026, modest home sales growth and elevated mortgage rates are reshaping furniture demand, according to a report in Furniture Today. Realtor.com projects existing-home sales to rise just 1.7% in 2026, with mortgage rates averaging about 6.3%, reinforcing a “lock-in” effect that limits mobility. Instead of full-home furnishing tied to moves, furniture spending is shifting toward targeted, room-by-room upgrades as homeowners stay put and reinvest. Strong home equity supports demand, but consumers are cautious, prioritizing durability, comfort and long-term value over trend-driven purchases. Financing flexibility remains critical as affordability pressures persist. Demographic shifts, including millennials accounting for nearly 30% of buyers and growing multigenerational households, are increasing demand for adaptable, high-quality furnishings. Overall, industry growth is steady rather than explosive, driven by intentional investment in existing homes rather than housing turnover.

• According to the CNBC/NRF Retail Monitor, furniture and home furnishings stores lagged behind broader retail gains in December 2025. Core retail sales rose 1.6% month over month and 3.5% year over year, reflecting results in line with the NRF retail forecast. However, furniture and home furnishings stores posted a 0.33% monthly increase (seasonally adjusted) and a 0.82% annual decrease (unadjusted), making them one of several categories to contract. Building and garden supply stores fell 5.3% year over year, and electronics and appliance stores fell 0.09% year over year. In contrast, categories such as clothing (6.1% year over year), sporting goods, hobby, music, and book stores (5.1%), and digital products (3.6% year over year) saw strong growth The data, based on Affinity Solutions’ anonymized card transactions, highlights competitive pressures facing furniture retailers.
• The Furniture and Related Products manufacturing industry is one of 15 manufacturing industries reporting contraction in December’s Manufacturing ISM Report on Business. Executives in the Furniture and Related Products manufacturing sector reported higher prices for raw materials in December. Additional manufacturing industries reporting contraction during the period were Apparel, Leather & Allied Products; Wood Products; Textile Mills; Paper Products; Chemical Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Petroleum & Coal Products; Primary Metals; Miscellaneous Manufacturing; Plastics & Rubber Products; Fabricated Metal Products; Machinery; Food, Beverage & Tobacco Products; and Transportation Equipment. Industries reporting growth were Electrical Equipment, Appliances & Components; and Computer & Electronic Products. Overall, economic activity in the manufacturing sector contracted for the 10th consecutive month in December, with the Manufacturing PMI registering 47.9.