By Raymond, Arthur G.
International Trade Forum , No. 2
The large U.S. market for wooden furniture, builders' woodwork and other processed wood products is growing, although moderately, and should offer opportunities for developing country exporters in some product lines, according to a new ITC market study In 1990 U.S. imports of wooden household furniture and components came to almost US$2.5 billion, wooden picture frames $89.5 million, wooden doors $73.6 million, wooden kitchenware $57.5 million, wooden flooring $21.7 million and wooden windows $15.6 million. Although competition is strong from domestic producers and foreign suppliers, exporters in developing countries should be able to find openings if they can furnish suitably priced items in the required styles and materials.
Developing countries already hold large shares in some of these imports, particularly for furniture, doors, flooring, picture frames and kitchenware. By drawing upon certain advantages that they may have in terms of lower labour costs and the availability of raw materials, and by focusing on well defined product ranges, they should be in a position to increase their sales to this market over the next several years.
Furniture and components
In 1990 the United States imported $3.3 billion worth of furniture and components. Of this, about $2.5 billion consisted of wooden bedroom, dining-room and occasional furniture and components. Imports that year were slightly lower than in 1989, reflecting an overall slowdown in furniture purchases, in contrast with the rapid import growth in the mid-1980s. Sales of furniture in general are expected to pick up during the next several years, growing at an estimated 3% annually.
More than 100 countries and areas supply furniture and components of all categories to this market. Ten of these accounted for almost 85% of such imports in 1990. Over half of these imports come from developing countries.
The import share of Taiwan Province (China), the main supplier, fell from 29% in 1989 to 25% in 1990. The shares of the other principal foreign suppliers of furniture and components to this market that year were Italy with 17%, Canada 14%, Mexico 7%, Denmark and Yugoslavia each 5%, Germany 4%, Thailand 3%, United Kingdom 2% and China almost 2%. Both Mexico and China have substantially increased their sales of these products in recent years.
During the next few years furniture producers in Taiwan Province (China) are expected to move to higher priced, higher quality goods in an effort to maintain their market share as their production costs rise. More moderately priced furniture and parts will probably increasingly originate from countries with lower wage levels such as Indonesia, Malaysia and Mexico. East European countries may also eventually become competitors on the world furniture market because of their strong woodworking tradition and low labour costs.
Domestic producers will, however, continue to be the major suppliers to this market. Many U.S. companies are investing in technology that can offset their high labour costs. Retailers' demands for fast delivery also give local producers a competitive edge.
The U.S. furniture market is divided into two major categories: household and office furniture. Of the two, household furniture offers better market opportunities for exporters in developing countries. It includes furniture for the living room, dining room, kitchen, bedroom and outdoors, plus children's furniture.
The wooden furniture sold on the market includes ready-to-assemble (RTA) and fully assembled items such as chairs, storage elements and wall units, both finished and unfinished.
Total retail sales of ready-to-assemble furniture are estimated at between $2 billion and $3 billion yearly, accounting for 6% to 10% of retail furniture purchases in the United States. Demand for furniture in this form is expected to grow more rapidly over the next decade than sales of conventional, fully assembled products. …