AFMA Study Predicts Growth for 2002

Art Business News, July, 2001

HIGH POINT, N.C.--Furniture shipments are projected to decrease 2.7 percent in dollar value this year but to achieve a stronger performance next year, with shipments increasing 3.7 percent to $25.814 billion, according to the recently revised Economic Forecast of the American Furniture Manufacturers Association (AFMA). This year, manufacturer shipments are expected to total $24.89 billion, the new forecast shows.

"The decade-long growth of the U.S. economy had to falter eventually," said Joseph P. Logan, AFMA's vice president of financial services. "The `wealth' effect that had bolstered consumption of consumer durables and housing has been reversed. The brakes have been put on the economy, but only temporarily."

The furniture industry has already started to improve following the Federal Reserves interest rate drop. "The drop in interest rates will boost the housing market, which in turn will result in stronger furniture sales," said Logan.

After conditions gradually improve this year, quarterly growth in furniture shipments next year is expected to range from 1.9 to 5.3 percent, resulting in a 3.7 percent overall gain for the year.

The AFMA forecast's econometric model of the furniture industry is based on the current economic outlook for the U.S. economy, which is prepared by the Research Seminar in Quantitative Economics at the University of Michigan.

"Although 2001 is shaping up as a challenging year for the furniture industry, we fully expect to regain any losses next year and be back on a healthy growth track," said Logan. "After several years of substantial growth, it is not surprising that we are experiencing this adjustment."