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NEWS

'Made in USA’ reappears at market

Sunday, October 23, 2011
(Updated 3:02 am)

  — One of the themes expected to emerge from the fall furniture market, which began Saturday in High Point, can be summarized in three words: “Made in America.”

Examples abound of what one market watcher calls “an emerging trend.”

  • A 16,000-square-foot Made in America Pavilion has been set up to showcase domestically made products such as furniture, lighting, rugs, wall art and accessories.
  • Other companies plan to introduce their first American-made lines, expand furniture operations in the U.S. or reopen plants that were shuttered when production shifted offshore in the past decade.
  • And various pre-market publications brim with ads for U.S.-made furniture and accessories.

“It’s a story to tell,” said Richard Bennington, a home furnishings professor at High Point University. “Manufacturers are trying to stand out from the pack. It’s a niche industry.”

But a report released earlier this month predicts that niche could be expanding in ways that could not have been imagined just a short time ago. The Boston Consulting Group said Oct. 7 that in the next five years, seven industry clusters — including furniture — will bring manufacturing jobs back from China.

“A surprising amount of work that rushed to China over the past decade could soon start to come back,” Harold L. Sirkin, the lead author of the analysis, said in a press release. “The economic impact could be significant.”

Across the seven industries, the report predicts  what it calls “a manufacturing renaissance” that will produce 2 million to 3 million jobs and between $80 billion and $120 billion in output.

The report did not say how many of those jobs would be in furniture, but it did say that U.S. production could increase by $3 billion to $4 billion.

Furniture imports from China total $14 billion, the report said, but some of that production likely will go to Mexico.

In addition to furniture, the report said, transportation goods, electrical equipment and appliances, plastics and rubber products, machinery, fabricated metal products, and computers and electronics will see a shift in production.

Unfortunately, the report said, the textile and apparel industry, another heritage industry in North Carolina, won’t be part of the recovery.

Goods that require intensive labor and high production volumes, such as textiles, apparel and televisions, likely will continue to be made overseas, the report said.

But those that need less labor and can be produced in modest volumes, such as furniture, household appliances and construction equipment, likely shift to U.S. production.

A number of factors play into what the report calls “a tipping point” that will lead to the shift in manufacturing.

In China, they include the increasing value of its currency, ongoing quality issues, higher transportation costs, difficulty in making design revisions, and the manpower needed to staff Chinese factories.

In the U.S., the list includes state-of-the-art machinery in domestic furniture plants, incentives offered by states and local governments and supply chains that are closer to the consumer.

In addition, wages in China have been rising by 15 percent to 20 percent a year, making the U.S. more competitive.

“We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015,” Sirkin said. “As a result of the converging economics, you’re going to see a lot more products 'Made in the USA’ in the next five years.”

That’s good news in North Carolina, a state that lost more than 32,000 furniture jobs in the past decade as production shifted to China because of its cheaper labor costs and government subsidies.

The state saw more than 200 furniture plants close during that time.

One of them used to belong to Bruce Cochrane of Lincolnton.

He sold Cochrane Furniture in the mid-1990s and the new owners shut it down in 2008.

After Cochrane quit making furniture, he spent more than a decade helping companies import product from China.

Now, he’s decided to reopen his former plant and call it Lincolnton Furniture. He’ll introduce his first line this week in High Point. The plant will employ 130; formerly more than 1,000 worked there.

Cochrane said he agrees with The Boston Consulting Group report.

“They just pegged it right on the head,” Cochrane said of the analysis. “That whole narrative is exactly what is happening. I have seen it firsthand. There is no question in my mind that it is coming back.”

There’s evidence around the furniture market to support that belief.

For example:

  • A Texas manufacturer called Four Hands, a long-time importer, will offer its first American-made line at this market. Called Republic, it will be made in Hickory.
  • Sen. Kay Hagan attended the unveiling Friday. “My favorite phrase is 'Made in North Carolina,’” Hagan said in an email, “but 'Made in America’ is a close second. ... I’m tired of shipping good-paying jobs overseas.”
  • The Made in America Pavilion will display products from more than 70 companies.
  • “I have to say, this initiative has absolutely taken off,” Brian Bunch, vice president of leasing for Market Square AC Management, said in a press release. “There is more interest than even we imagined.”
  • This year, Furniture Preview, a pre-market publication, added a section for manufacturers selling domestically-made products. More than 50 took part.

“I think it shows there is real momentum behind the 'Made in America’ movement,” Julie Messner, vice president of publication sales at the International Home Furnishings Center, told Furniture Today. “More retailers and designers are asking for these products and more manufacturers are stepping up.”

Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com
 

Accompanying Photos

Joseph Rodriguez (News & Record)

Photo Caption: Brothers Josh Culler (left) and Brack Culler put up enlarged photos of workers from their Braxton Culler factory (located in High Point) at the Suites at Market Square special exhibit 'Made in America Pavilion', on Thursday.

Comments

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UNCGProf

October 23, 2011 - 8:28 am EDT

Well this is a very optimistic report. Unfortunately experience tells me they won't move jobs back to the US when Chinese labor becomes too expensive..they'll just find another underdeveloped country where the workers are still willing to work for pennies a day, and move the jobs over to that country. It's not as if the only countries where you can manufacture things are China or the US.

nippded twistle

October 23, 2011 - 1:44 pm EDT

Products being made in 'Mericuh is important?

ravencottage

October 23, 2011 - 5:27 pm EDT

nippded twistle...shouldn't you be in a tent sleeping in a park somewhere?

One of the contributing factors to furniture manufacturing leaving China and returning here is the sharp decline in quality. Folks are tired of waiting months for a shipment then opening up the containers and finding poorly constructed and finished garbage.

lexalexander

October 24, 2011 - 11:23 am EDT

And not so much in furniture, but in other industries, it turns out China's lax attitude toward counterfeiting has some expats returning home as well. Turns out our Galtian overlords need the government more than they thought they did. Color me shocked.

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