The furniture industry experienced a modest turnaround last year, but not strong enough to offset what some describe as the biggest sales downturn in recent memory.
A report released last week by Smith Leonard, a High Point accounting and consulting firm, showed that sales in 2010 jumped nearly 6 percent following declines — some of them double digits — in the four previous years.
From 2006 to 2009, the survey said, sales dropped by 32 percent.
“I don’t think we have seen this sort of downturn, (one that’s) this long or this deep,” said Ken Smith, managing partner of the firm and author of the annual report.
“The recession for the industry was longer than I think anyone expected it to be.”
But one year of growth does not make a recovery.
The survey of an undisclosed number of residential furniture manufacturers and distributors showed that the industry recorded sales of $19.9 billion last year compared with $18.6 billion in 2009.
Yet, that’s far below the $27.2 billion in sales in 2005, the last year before the downturn.
“While we did see improvement, 2010 was another year of ups and downs,” the report said. “For the first six to eight months, business seemed to pick up. While certainly not to ... prior levels, at least most of the industry was finally moving in the right direction.”
But about the end of last summer, business became unstable, the report said. This trend continued into 2011.
Richard Bennington, professor of home furnishings at High Point University, describes what’s happening as “the seeds of a recovery.”
As the recovery unfolds, he says, the furniture industry will look much different than it once did.
“It’s going to be a long time before you see these mega (manufacturing) plants,” Bennington said. “The growth is going to be in the small niche company that defines its niche well.”
Area economic development officials say that’s already happening.
In recent months, they’ve announced a number of furniture company relocations and expansions. Most have been small operations, employing fewer than 100 people. But one has been sizeable.
United Furniture Industries said last year that it would expand its North Carolina presence by opening a plant in Davidson County to manufacture living room and den seating. The move would create 150 jobs.
Then, in March, the company announced it would expand again, adding another 200 jobs.
In a news release, Steve Googe, executive director of the Davidson County Economic Development Commission, said the expansion signals “the Triad region’s furniture sector is on the comeback.”
Another optimistic sign can be found in the growth of exports.
The North Carolina Department of Commerce says furniture shipments abroad jumped 19.4 percent in 2009-10 after declining nearly 40 percent in 2008-09. Exports are up in 2010-11 by 13.3 percent.
Increasingly, industry leaders say, consumers want products that are made in America. They’re looking for better quality and greater selection.
They say companies have found that because of high freight costs it’s cheaper to make furniture in the U.S. than overseas. They add that the emphasis on furniture manufacturing in China, which enticed some companies to shift their production offshore in recent years, has declined.
“The U.S. furniture industry finds itself in a strengthening position,” said Charlie Greene, chairman of the North Carolina Furnishings Export Council. “The Chinese furniture industry is not as robust as it used to be. ... Now, there are lots of companies looking here.”
Yet, the sluggish economic recovery still makes furniture a tough sell.
“The furniture industry is making a recovery but it is not as noticeable yet because we still have got to get the rank-and-file American worker back to work,” Greene said. “They buy furniture.”
Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com
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