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
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                Apr 19, 2022 - Outbreak In China Shuts Factories Again
                                • Domestic furniture manufacturers may benefit from supply chain issues that are creating more uncertainty with each new spike in COVID-19 cases. As of April 11, 87 of China’s 100 largest cities were in some form of lockdown, according to economic research firm Gavekal Dragonomics, which has been tracking lockdowns during the pandemic. According to The New York Times, the restrictions were a drag on China’s industrial output in March, and April’s results are expected to be worse.
                                • Near-term demand for office furniture remains uncertain due to continually changing return-to-workplace plans. New COVID-19 cases caused by the Omicron variant fell as quickly as they rose, giving many employers hope that more of their white-collar workers return to the office. However, the return to offices has been slow. During the first week of December 2021, the office occupancy rate was about 40% in the ten cities monitored by security firm Kastle Systems. By April 6, 2022, office occupancy was 43.1%. Hybrid working models are expected to be the new norm, with long-lasting impacts on office occupancy.
                                • Seasonally adjusted furniture and home furnishings retail sales increased 0.67% in March 2022 compared to the prior month, according to the US Census Bureau. Unadjusted furniture and home furnishings retail sales rose 5.5% in the first three months of 2022 compared to the same period in 2021.
                                • Pandemic-related supply chain disruptions continue to create backlogs and material shortages. Global supply chain snarls have also driven up furniture makers’ transportation costs, increased instances of stock-outs, and reduced sales. In the fourth quarter of 2021, US furniture manufacturer Hooker Furnishings saw its sales drop 13.2% year-over-year amid high freight costs, shipping bottlenecks, higher prices for components, and labor shortages.
                                • Total construction spending increased 0.5% in value month over month on an adjusted basis in February 2022, according to the US Census Bureau. Total unadjusted construction spending rose 10.4% in the first two months of 2022 compared to the same period in 2021. Residential construction spending increased 1.1% month over month in February and was up 15.5% for the first two months of 2022. Nonresidential construction spending decreased 0.1% month over month but increased 5.8% in the first two months of the year compared to the same period a year earlier.
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