Productivity Trends in Kitchen Cabinet Manufacturing

By Brand, Horst; Bennett, Norman | Monthly Labor Review, March 1985 | Go to article overview

Productivity Trends in Kitchen Cabinet Manufacturing


Brand, Horst, Bennett, Norman, Monthly Labor Review


Output per employee hour in the manufacture of wood kitchen cabinets rose at an average annual rate of 2.1 percent between 1972 and 1982, or at virtually the same pace as for all manufacturing (2.0 percent). However, annualized increases in both output and employee hours were greater for the industry (4.7 percent and 2.5 percent) than for total manufacturing (1.4 percent and -- 0.5 percent).

Factors underlying the 10-year productivity advance in the making of kitchen cabinets include improvements in woodworking machinery and particleboard processing equipment; faster drying glues and coating materials; and more mechanized transfer apparatus. Capital expenditures increased strongly during the latter half of the seventies, although they subsequently tapered through the early eighties.

The productivity trend in the industry was market by two distinct phases, which paralleled developments in all manufacturing. Between 1972 and 1979 (the industry's output peak for the period examined here), productivity rose strongly, reflecting fast-paced output gains. But over the 1979-82 period, which was marked by recession and a deep slump in residential construction, the trend reversed direction, with output declining at an even faster rate than employee hours:

Manufacturing generally experienced a slowdown in its productivity rate between 1979 and 1982, rather than a reversal; but the trends in output and employee hours were downward, as in kitchen cabinet manufacturing.

Year-to-year changes in the industry's productivity were quite volatile, ranging from an increase of 23 percent in 1977 to a decline of 11 percent in 1982. In 5 of the 10 years after 1972, productivity rose; in the other 5, it fell. However, in 2 of the years of rising productivity, the increase was attributable to a more rapid decline in employee hours than in output. And in 3 of the years of declining productivity, both output and employee hours increased, but the latter grew faster than the former. These patterns contrast with the experience of durable manufacturing industries generally, which evidenced a much nattower range of year-to-year fluctuations in productivity during the review period ( - 3 percent in 1974 to 4 percent in 1981). The volatility of productivity movements in kitchen cabinet manufacturing stems largely from the industry's close link to the highly cyclical demand for residential housing.

Output and demand factors

The kitchen cabinet industry manufactures stock line and custom cabinets, as well as bathroom vanities. Stock line cabinets, which account for about one-half of industry output, are mass produced, and are distributed to residential building contractors. Custom cabinets represent roughly one-third of output and, while the cabinets are built to customer specifications, large-scale production is often feasible with the application of flexible manufacturing technologies. Banities make up the remaining one-sixth of outpup. Most kitchen cabinets and vanities are made of wood; those made of plastics accounted for 14 percent of output in 1982 (up from 11 percent in 1977). The manufacture of metal cabinets, which were once a large proportion of total kitchen cabinet production, is no longer a significant industry activity.

Industry output is closely linked with residential construction, replacement, and rehabilitation markets. Among these markets, new residential housing starts provide an estimated one-fourth of the industry's major outlets. Over the study period, such starts tended to decline from the high set in 1972, although there were secondary peaks in the late seventies. Housing starts subsequently plummeted, however, so that by 1982 levels were nearly two-fifths below those recorded in 1979.

Throughout most of the review period, replacement and remodeling activity, spurred in large part by high rates of sales of existing homes, tended to offset the impact of declining housing starts on the output of cabinets and vanities. …

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