Dramatic Changes In Furniture Manufacturing

The furniture business until fairly recently was a  fairly low-tech business, with many items built almost completely by hand. In addition, the great majority of items purchased by consumers in the United States were manufactured in this country.

Sweeping changes have no occurred and many industry experts expect that the majority of furniture sold in the U.S. will be manufactured overseas with a high proportion produced in China and other Asian countries. This development transpired in the furniture business much later than in other industries such as clothing and shoes. The net result is the loss of a substantial number of manufacturing jobs in the U.S. and the closure of many furniture factories.

For many years, furniture has been imported into the U.S. in somewhat limited quantities as compared to the amount produced domestically. Examples of countries importing furniture include Canada which still ships furniture to the U.S. although less than in the past due to two situations. First, the exchange rate for the Canadian Dollar as compared to the U.S. Dollar. Second, Canadian furniture manufacturers, like many U.S. furniture manufacturers, cannot compete with the prices of products manufactured in China and  Far East countries. Canadian sources manufactured both upholstered furniture as well as wood items for the U.S. market.

Mexico is also an importer of furniture into the U.S. and was the first country where U.S. manufacturers “outsourced” production  in order to utilize lower labor costs. Mexico’s furniture production has been primarily lower cost wood items. Most of their items have been very low tech and quality has been at times mediocre at best. Again, much of this production has now been moved to China due to both cost and quality considerations.

Denmark and Sweden continue to be U.S. furniture suppliers. Known for contemporary designs, Scandinavian furniture is marketed primarily in specialty stores devoted to that genre. In addition, IKEA, a major Scandinavian retailer has had a highly successful introduction to the U.S. Market. Generally speaking, production of this category of furniture has not shifted yet to the Far East as it is more of a niche and not sold in as high of volume as other types of furniture.

Italy has been a provider of furniture to the U.S. market for decades, primarily in high quality leather upholstered items. Italy is known as the producer of the best quality leather furnishings in the world and still holds that distinction but they have now experienced issues as Chinese copies of their furnishings are now on the market at significantly lower prices.

The net result is that China and to a lesser degree other Far East countries have become a major resources for furniture sold in the U.S. Many wood furniture companies now have closed some or all of their U.S. manufacturing facilities and have become “Marketers” for the Chinese producers. Well known names such as Broyhill, Lexington, Henredon and many others have followed this track. Obviously this has occurred due to the lower labor costs in China. In addition, China’s government is “manufacturing friendly”. The U.S. government burdens the manufacturer with a multitude of requirements including EPA items, OSHA regulations, tons of paperwork and in general makes it virtually impossible for the U.S. manufacturers to be competitive with the low cost Far East manufacturers.

The transition to Chinese manufacturing began with the easing of trade regulations. As far as furniture categories, it began with the production of wood items (bedroom, dining room and tables). At first, the Chinese produced items were rudimentary at best. Over the past decade, U.S. manufacturers (looking for lower cost items) have provided the Chinese with all the manufacturing knowledge they needed. Now the Chinese facilities produce high quality furniture that is equal to what is produced in the U.S. In fact in some areas their product is superior to that produced in the U.S., specifically “hand-carved” treatments on wood furnishings. Some of the largest and most high-tech furniture manufacturing facilities in the world are now in China.

There was one fairly recent “blip” in the importation of Chinese domination of furniture manufacturing. A group of  U.S. companies was able to have an “Anti-Dumping” provision put into effect by the government. The net result of this action was that a number of the Chinese manufacturers were hit with duties. In spite of these fees, the Chinese product is in most cases still lower in cost than those manufactured in the U.S. This “Anti-Dumping” action also resulted in some production of wood items being moved from China to other Far East countries with Viet Nam being the most prevalent.

All in all, the furniture manufacturing business has experienced a dramatic change and one not necessarily beneficial to the long term health of the U.S. economy.