It’s the time of year when we reflect on the state of our industries and look ahead to the New Year to discover what lies in store for our supply chain, customers and ultimately, consumers. Following a year of steady growth despite a turbulent international wood market, the woodworking industry is predicted to continue its upward trajectory into 2019. It continues to be a vital contributor to the U.S. economy, producing $210 billion in products annually and accounting for roughly 4% of the total 2018 U.S. manufacturing GDP.
According to The Freedonia Group’s recent cabinets market in the U.S. study, the country’s kitchen cabinet demand is expected to increase 5.9% per year to $17.1 billion in 2021. A 5.2% annual growth is projected for base cabinets, and a 7.7% year to year increase is predicted for tall kitchen cabinets with an expected market value of $3.2 billion by 2021. In fact, the Kitchen Cabinet Manufacturers Association reported sales up 2.3% in September 2018 compared to the same month last year. These numbers show that the increase in cabinet purchases is not a random spike, but a continuous trend that more people are choosing to purchase kitchen cabinets.
Further, the October 2018 MADA/OFI Trends survey, a tool that measures the current business activity of the commercial (office, education, healthcare, and hospitality) furniture industry and its suppliers, revealed a positive outlook for industry sales into the 1st Quarter of 2019. The survey focuses on ten key business activities: gross shipments, order backlog/incoming orders, employment levels, manufacturing hours (overtime vs. reduced hours), capital investment, tooling expenditures, new product development activity, raw material costs, employee costs, and the respondents’ personal outlook on the industry. Respondents rated each area on a scale of ten (the highest) to one (the lowest), and with a 54.98 survey average, the overall index indicates strong and steady growth.
Economic Factors: Reduced unemployment and a strong, continuously improving housing market have supported healthy furniture sales over the past few years. Further, a trending increase in disposable personal income since 2013 has also contributed to sales of household furniture.
Political Factors: President Trump’s plan to increase tariffs from 10% to 25% on $200 billion worth of Chinese goods at the beginning of the new year have been postponed. Calling a truce in the United States and China trade war earlier this month, President Trump and President Xi Jinping agreed to hold off on new tariffs. While this is just a pause to let diplomacy have a chance, the postponement provides some breathing room for the woodworking industry, alleviating the immediate pressure to source outside of China.
Genesis Products Remains Optimistic
By closely monitoring the critical economic and political factors impacting industry trends and innovations, Genesis Products is both optimistic and enthusiastic that the growth reported throughout the past year is predicted to continue into 2019. We look forward to partnering with our vendors, customers and strategic partners to deliver our Product Driven. People Powered value propositions to the woodworking industry.