This report analyzes the economic and demographic forces impacting the demand for household furniture. The study is finely segregated by product categories and geographical regions. Forecasts are provided to 2015. The author 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 American furniture demand.
The 2005 value of the furniture market in the United States amounted to an estimated $78.5 billion measured at retail prices. Of this, 38.0% is wooden case-goods (mainly bedroom furniture), 33.9% is upholstered furniture (mainly chesterfields and matching chairs), 17.1% is mattresses and foundations, and the remaining 11.0% is metal furniture (mainly outdoor furniture).
Measured at manufacturers’
Over the last two decades household furniture purchases increased significantly from $29.3 billion in 1985 to $78.5 billion in 2005, or 168%. In other words, sales increased at an average annual pace of approximately 5.5% over this period. However, growth has been much slower recently, and in 2005 growth of household furniture sales was only 3.9% (nominal terms).
Some of the growth during the past 20 years was due to rising prices. If expressed in constant 2000-dollar terms, the increase between 1985 and 2005 was 146%, that is from $ 34.0 billion to $ 83.9 billion.
The number of households in the United States will grow by about 12.5% over the next decade (that is about 1.2% per year). This pace is a bit faster than the 8.0% pace for the total population. We expect real disposable income per household will also increase by about 42.6% (or slightly more than 3.5% per year) over that period. Thus total real disposable income will grow by about 55.1% between 2005 and 2015.
Based on these assumptions, We expect furniture spending growth to continue throughout the projection horizon, accelerating from an annual real rate of 4.1% this year to 5.5% next year, Thereafter, it will gradually slow down to a rate of about 4.0% in 2015. Thus, real household furniture spending - in constant 2005 dollars - will grow by 55.1% from $78.5 billion in 2005 to $121.7 billion in 2015.
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