Trends in US Demand for Household Furniture
¡¾2002.08.12¡¿

The 2001 value of the domestic furniture market in the United States amounted to an estimated US$64.1 billion measured at retail prices. Measured at manufacturers' prices sales reached about US$30.6 billion. The US$33.5 billion difference between the prices received at the retail level and the prices received at the manufacturers' level represents transportation costs, wages and other costs at the retail level, the retailers' profit margin, plus all sales taxes. Thus, furniture manufacturers receive about 48% of the total dollars spent by U.S. households on furniture.

Over the last two decades household furniture purchases increased significantly from US$21.7 billion per year in 1981 to US$64.1 billion in 2001, or 195%. In constant dollar terms, the increase amounted to 131%

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.

The longer-term prospect of he American furniture market depends on (i) the growth of the number of households, and (ii) the growth of the average disposable income per household. The number of households in the United States will grow over the next decade by close to 11% (or by about 1.0% per year), a pace slightly faster than the 8.4% pace for the total population. Analysts expect real disposable income per household will also increase by about 11% (or by about 1% per year) over that period. Thus total real disposable income will grow by just over 22% between 2001 and 2011. Therefore, it is anticipated that real household furniture spending will also grow by 22% over the same period from US$64.1 billion in 2001 to US$78.5 billion in constant 2001 dollars in 2011.

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.





Households' furniture expenditures are greatly influenced by the household income, size of the household, age of the household maintainer and housing tenure. Household income and the size of a household over its lifetime typically rise then fall with the age of the household maintainer.

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