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in US Demand for Household Furniture
|Trends in US Demand for Household Furniture
In the United States an increasingly smaller share of personal income is spent on consumer goods while expenditures on services are growing. The share of after-tax income devoted by US households to the purchase tangible consumer goods decreased from 60% in 1975 to 44% in 2001.
Furniture consumption is no exception to this phenomenon. The household furniture share of after-tax income has been on a gradual long-term decline. From its peak of 1.32% in 1964 it fell to 0.86% at the present time. The shrinking share of furniture is partially based on the fact that households are becoming smaller. While the average household had 3.4 persons in 1960, the ratio has fallen to 2.7 persons in recent years.
Interestingly, in constant dollar terms no such downtrend occurred which suggests that furniture prices were less subjected to inflationary pressures than after-tax household incomes.
Following real gains of 1.7% in 2001 real furniture
expenditures may accelerate to 2.3% in 2002. This is substantially slower than the hurried
pace of the late 1990s. Analysts at AKTRIN expect furniture spending growth to slow from
an annual rate averaging around 2.5% in 2003 to a rate of 2.0% per year thereafter.
In 2001, each of the 110.6 million households in the United States spent an average of US$580 for household furniture (measured at retail prices and including all sales taxes).
The largest amount was spent on wooden furniture with an estimated value of US$254 per household, or 44% of the household furniture total. Major items within wooden furniture include bedroom furniture (US$88 per household), dining room furniture (US$52), living room (US$23) and kitchen furniture (US$22)
The second largest category, upholstered furniture, is estimated to have accounted for US$218 of furniture spending per household, or for 37.8% of the household furniture total.
The next category is mattresses and related products which accounted for an estimated US$74 per household in 2001, or 12.5% of the household furniture total. Finally, the smallest category is metal household furniture which is estimated to have accounted for US$34 per household in 2001, or 5.8% of the total. Major items within the metal category include outdoor furniture (US$23 per household) and dining room and kitchen furniture (US$6)
Not surprisingly, the average amount spent on furniture increases with the level of average household income.
The frequency of furniture purchases increases with income as
well, starting at about one purchase every five years among consumers with incomes under
US$5,000 and reaching one purchase every 1.7 years (approximately 20 months) among those
with incomes over US$70,000. This suggests that, while purchasers in the mid to low income
brackets may not purchase furniture frequently, when they do make a purchase the amount
they spend is still fairly significant.
For example, as of 2000 average household income in the USA peaked between the ages of 45 and 54 at US$58,889 per year. This compares to just US$19,744 for households headed by a person under the age of 25 and for US$25,220 for households headed by a person over the age of 65.
The varying income and household size over the lifecycle explains that average household spending is highest in the age bracket of 25 to 64. However, the proportion of income allocated to furniture purchases is highest in households headed by a person under the age of 25, reflecting the high degree of family formation in those age groups.
On the basis of tenure, homeowners spent much more on household furniture (an average of US$719 as of 2000) than renters (US$332). Homeowners account for about 66% of all households but 80% of all household furniture purchased. On the other and, renters account for 34% of all households but only purchase 20% of all household furniture
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