Furniture Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation 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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 22, 2023 - Furniture Spending to Rise
                                • About 41% of consumers plan to spend more on furniture in winter 2023 compared to winter 2022, according to a new survey by KPMG in Chain Store Age. In the “KPMG Consumer Pulse Winter 2023” report based on a survey of 1,000 US consumers, shoppers are also planning a 15% increase in grocery spending and an 11% increase in automotive spending in winter 2023. Other categories expecting a boost in spending include toys (42% of consumers), hobby supplies (38%), restaurants (38%), electronics/appliances (34%), and apparel (32%). Forty-four percent of consumers reported an average household income increase of 16% in 2022 over 2021, while 21% reported a decrease of 31%.
                                • Sales for furniture and home furnishings stores increased 0.4% unadjusted year over year but fell by 2.5% month over month seasonally adjusted in February 2023, according to data released by the National Retail Federation. Overall retail sales were up 5.4% in February 2023 over a year ago but down 0.4% from January 2023, according to the US Census Bureau. NRF’s retail sales calculation, which excludes car dealers, gas stations, and restaurants, showed an increase of 6.5% unadjusted year over year and 0.5% month over month in February 2023. According to NRF Chief Economist Jack Kleinhenz, “Sales growth has slowed in recent months, but consumers’ economic health still looks good. February is typically the slowest month of the year, so monthly fluctuations are expected. Sales are higher than last year and that’s due in large part to the strong labor market, which means more income and spending.”
                                • Improved housing affordability and easing mortgage rates pushed home builder sentiment higher in February 2023, according to the National Association of Home Builders (NAHB). Homebuilder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), increased seven points to 42 in February 2023 over the previous month, marking the second consecutive monthly gain and the highest reading since September 2022. Any HMI reading over 50 indicates more builders see conditions as good than poor. To attract buyer traffic, 57% of homebuilders reported providing buyer incentives, such as cutting prices, offering mortgage rate buy-downs, and paying points for buyers, according to the NAHB.
                                • Total unit sales of discretionary general merchandise in the US fell 7% in 2022 over the prior year, according to NPD Group data in Furniture Today. While the year started strong for general merchandise sales, things soured after the economy took a downturn in March. From March to December 2022, only 11 weeks delivered revenue gains, with the highest-selling periods being mid-July promotions and the December holiday season. Sales are projected to decline in many home and home improvement categories in 2023, compared to the robust sales during the pandemic. Still, sales may see an uptick as consumers will be looking to replace some of the products they purchased in the early months of the pandemic. According to Joe Derochowski, NPD’s vice president and industry advisor for the home and home improvement industries, consumers will settle into a more structured life that “still leans toward a home-centric lifestyle.”
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