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News Release, 
September 15, 2005

EMPLOYMENT AND WAGES IN THE CANADIAN FURNITURE INDUSTRY

The AKTRIN Furniture Information Center has published a new study on EMPLOYMENT AND WAGES IN THE CANADIAN FURNITURE INDUSTRY.
Below are some of the main findings of the study.

As of 2004 the furniture industry in Canada employed some 102,429 persons, more than one-third higher than 10 years ago, but down 1.8% from 2003. The improvement from its 1993 recession low of just 62,831 is truly remarkable. In other words furniture industry employment has exhibited much resiliency, especially considering the impacts the industry faced since the early 1980s from Canada  free trade agreement. The more recent employment decline is a reflection of the industryslowdown due to the strengthening Canadian dollar and more Asian competition.

The rise and subsequent fall affected predominantly production workers. Indeed, salaried/commissioned employees continued to rise during the past three years.

Interestingly, the number of firms in the furniture industry declined. In 1994 there were approximately 2500 furniture establishments in Canada , but a decade later it had fallen almost one-third to about 1700.? Medium sized firms shrank relatively more than either large or small firms. This suggests that you either have to be big to compete internationally, or small and flexible to carve out a niche and survive.

As of 2004 the major furniture employer remains the household and institutional furniture and kitchen cabinet manufacturing segment with 62,521 employees or 61% of total employment in the furniture industry. This segment is followed by the office furniture segment with 33,610 employees or 33%. The other furniture segment (which includes mattresses) accounts for only 6,298 employees or 6% of the total.

In 2004 Ontario accounted for 43% of all furniture employment, with Quebec accounting for 34%. The remaining 24% are scattered throughout the rest of the country, with
Manitoba, Alberta and BC being the next most important provinces. Ontario dominates the office furniture, metal household furniture, upholstered household furniture and kitchen cabinets segments, while Quebec dominates in wooden household furniture.

FURNITURE EMPLOYMENT BY INDUSTRY SEGMENT

When furniture employment is expressed as a percentage of the provinces?overall manufacturing employment, Manitoba at 9.4% had the largest portion of manufacturing employment devoted to furniture manufacturing.
Manitoba is followed by Quebec with 6.2% of total manufacturing employment, well above the Canadian average of 5.1%.
The percentage in all other provinces is below the national average.

The average furniture firm in
Canada in 2004 employed 53 persons. ? By firm type the average number of employees ranges from a high of 98 in the office furniture segment to a low of 31 ion the wooden household furniture segment. The furniture industry is dominated by a very few giants and a large number of very small companies. Well over three quarters of all establishments fall below the average of 53 employees. Only some 13% of establishments have 100 employees or more.

The degree of employment concentration has changed somewhat during the past decade, reflecting the industry's adaptation to increased economy of scale production.
?Since the early 1990s recession the furniture industry? real value added grew at a faster pace than employment. So furniture productivity has been growing quickly, no doubt propelled by a compelling need to use more labor saving technologies in today? competitive environment

Increased automation and the adoption of new electronic and other processing technologies will lead to a continuing shift from low skill to high skill occupations.
Shortages for skilled labor in the furniture industry persist to this day. The influx of skilled European labor has dwindled to a trickle, and Canada is not yet producing the required quantity and quality of skills from within its own ranks.

Between the early 80s and the early 90s there was the slight decline in real wages but following the recession in the 90s, there was a modest reversal of that trend. Assuming positive growth of the economy, real wages can be expected to continue to increase in the years to come.? Furthermore, workers and managers will need more specialized skills, and such workers can only be attracted by higher pay rates.

The aging of the population will also drive wages to higher levels.
The flow of young and relatively inexpensive workers will become less abundant.
As a result, industry will be forced to increasingly engage more mature workers, who are invariably more expensive, but not necessarily more skilled, on modern machines.
All of which suggests training and will take on added significance in the furniture industry over the decade ahead.

As of 2004 the average furniture industry production employee received $17.50 per hour compared to $19.87 per worker in manufacturing in general.
Thus there is an 13.5% gap between the earnings of production workers in furniture and of production workers in manufacturing generally. ?In 1994, however, the gap was actually much wider at 37.9%, so a noticeable relative improvement in furniture production wage rates has occurred.

Average hourly earnings in the household segment always lagged behind those of the office furniture segment. ?

AVERAGE HOURLY EARNINGS OF MANUFACTURING AND FURNITURE MANUFACTURING PRODUCTION WORKERS, 1994 to 2004 IN $

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