Furniture Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 13,400 furniture manufacturers in the US produce furniture and related articles using a variety of materials and production processes. Product categories include household and institutional furniture (upholstered and non-upholstered), kitchen cabinets, countertops, and office furniture and fixtures. Furniture manufacturers may mass produce or custom-make products. Companies produce semi-custom products by modifying stock goods according to customer specifications.
Variable Raw Materials’ Cost
Fluctuations in the cost of raw materials affect profitability for furniture manufacturers.
Fashion-Driven Trends
Household furniture is fashion-oriented and demand is driven by home design trends and fads.
Industry size & Structure
The average furniture manufacturer operates out of a single location, employs about 22-27 workers, and generates $4-8 million annually.
- The furniture manufacturing industry consists of about 13,400 companies that employ about 321,000 workers and generate about $71 billion annually.
- Industry concentration varies - kitchen cabinet and countertop manufacturing is fragmented, while some segments of household furniture are concentrated.
- Some large companies are vertically integrated, and may produce raw materials or have retail operations.
- Large companies include Ashley Furniture, La-Z-Boy, Steelcase, and Leggett and Platt.
Industry Forecast
Furniture Manufacturers Industry Growth
Coronavirus Update
Nov 12, 2021 - Factories In Asia Reopen
- Asia’s factory activity increased in October as COVID-19 infections decreased, but rising input costs, material shortages, and slowing Chinese growth cloud the outlook. China’s factory activity expanded at its fastest pace in four months in October, the private sector Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) showed. A PMI sub-index for output showed, however, that production shrank for the third straight month due to power shortages and rising costs. Factory activity expanded in Vietnam, Indonesia, and Malaysia in October as operations gradually normalized after being hit by shutdowns caused by a spike in COVID-19 infections. Experts note, however that supply/demand equilibrium will not return soon. “While October Manufacturing PMIs point to a strong rise in manufacturing output, industry is likely to be working through huge backlogs of orders for many months to come and resulting supply shortages further afield are set to persist,” said Alex Holmes, emerging Asia economist at Capital Economics.
- Furniture and home furnishings retail sales increased 3.7% in value month over month in August, according to the US Census Bureau. The increase follows four consecutive months of decreasing sales. The increase occurred despite fears that escalating COVID-19 cases and supply chain issues would reduce consumer spending.
- Near-term demand for office furniture remains uncertain due to continually changing return-to-workplace plans. Advertising and technology firm Google, for example, announced in August another delay in its return-to-office plan, pushing its reopening date to January 2022. Google planned its return for October, which was a delay from September, which was a delay from July 2021. Companies including Apple, Amazon, Facebook, and Starbucks already announced postponements with similar timelines, and more employers are expected to follow if delta variant continues spreading throughout much of the country.
- Small-business owners who received taxpayer-subsidized Paycheck Protection Program (PPP) loans of $150,000 or less during the coronavirus pandemic can seek forgiveness directly with the government through an online portal that was opened on August 4, allowing them to sidestep the private financial institutions that ran most aspects of the program for 14 months.
- Pandemic-related supply chain disruptions continue to create backlogs and material shortages. The furniture industry is reporting delays of four months or longer at many points in the supply chain, and according to the Commerce Department. Manufacturers cut back production when the pandemic started in March 2020, according to Scott Paul, president of the Alliance for American Manufacturing. They also cut raw material purchases in anticipation of declining consumer demand. Demand for goods did plunge in April but rebounded steadily, fed by households that have held up well during the pandemic. Manufacturers are now scrambling to restock raw materials in response to unexpectedly high demand. Experts warn, however, that demand could shift back to services in the summer as more Americans get vaccinated. Manufacturing could slow as a result.
- A survey done by Global Workplace Analytics and Iometrics found that only 6% of employees do not want to work from home at all while 76% want to be in the office an average of 2.5 days a week. "Our forecast is that once the dust settles, 25%-30% of the workforce will continue to work from home at least one day a week, with the sweet spot being about 2.5 days," said Kate Lister, president of Global Workplace Analytics.
- Household and institutional furniture manufacturing industry employment increased 3.7% year over year in September but was down 4.9% compared to September 2019 according to the US Bureau of Labor Statistics. Office furniture and fixtures manufacturing industry employment was unchanged year over year in September but was down 13% compared to September 2019.
- Total construction spending decreased 0.5% in value month over month on an adjusted basis but increased 7.9% in value year over year on an unadjusted basis in September, according to the US Census Bureau. Residential construction spending decreased 0.4% month over month but increased 19.2% year over year in September. Nonresidential construction spending decreased 0.6% month over month and 1.2% year over year in September.
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