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July 2023 Sees a Drop in U.S. Imports of Upholstered Furniture to $489M


July 2023 Sees a Drop in U.S. Imports of Upholstered Furniture to $489M

U.S. Upholstered Household Furniture Imports

After three months of growth, overseas purchases of upholstered household furniture decreased by -7.7% to 109K tons in July 2023. Over the period under review, imports saw a relatively flat trend pattern. The pace of growth appeared the most rapid in April 2023 with an increase of 40% month-to-month.

In value terms, upholstered household furniture imports shrank slightly to $489M (IndexBox estimates) in July 2023. In general, imports saw a slight decline. The growth pace was the most rapid in April 2023 with an increase of 23% month-to-month.

Imports by Country

China (56K tons), Vietnam (33K tons) and Malaysia (4.8K tons) were the main suppliers of upholstered household furniture imports to the United States, with a combined 86% share of total imports. Mexico, Thailand and Italy lagged somewhat behind, together comprising a further 6.5%.

From July 2022 to July 2023, the most notable rate of growth in terms of purchases, amongst the main suppliers, was attained by Thailand (with a CAGR of +2.2%), while imports for the other leaders experienced mixed trend patterns.

In value terms, Vietnam ($194M), China ($155M) and Mexico ($46M) were the largest upholstered household furniture suppliers to the United States, together comprising 81% of total imports.

Vietnam, with a CAGR of +0.5%, saw the highest growth rate of the value of imports, among the main suppliers over the period under review, while purchases for the other leaders experienced a decline.

Import Prices by Country

In July 2023, the upholstered household furniture price amounted to $4,467 per ton (CIF, US), rising by 5.4% against the previous month. Over the period under review, the import price, however, showed a mild reduction. The growth pace was the most rapid in January 2023 an increase of 7.4% month-to-month. Over the period under review, average import prices reached the peak figure at $5,162 per ton in July 2022; however, from August 2022 to July 2023, import prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major supplying countries. In July 2023, the country with the highest price was Mexico ($14,141 per ton), while the price for Malaysia ($2,440 per ton) was amongst the lowest.

From July 2022 to July 2023, the most notable rate of growth in terms of prices was attained by Mexico (+2.2%), while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox Market Intelligence Platform  


Rapid Recovery of the Furniture Industry Restores the Turkish MDF Market from the Pandemic

IndexBox has just published a new report: Turkey – MDF – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

Following the easing of the quarantine measures in Turkey, the demand for MDF from the furniture and construction industries increased tangibly, recovering from a sharp drop recorded over April – May 2020.

After working remotely during the lockdown, people began to pay more attention to their homes and shop more for furniture and building materials. This led to a revival of the construction and furniture markets. If the country will return to pandemic-free life in 2021, Turkey’s real GDP is projected to grow by about 3% per annum in the medium term.

The furniture and construction industries, as the main consumers of MDF, have been hit by the COVID crisis. Restrictive measures during the pandemic led to many enterprises were put on hold, construction projects paused, and sales of furniture were hampered for several months. There was a drop in GDP of approx. -0.5% against 2019, which worsened the slowdown in the Turkish GDP growth recorded over the last three years. The second quarter of 2020 was also marked by a sharp drop in Turkish investment in fixed assets. Against this background, MDF production volumes bottomed out against the last year in April 2020.

The overall recovery of the economy began in the third quarter of 2020. The volumes of investment in fixed assets from this period started to increase, in the fourth quarter of 2020 they exceeded the corresponding indicators of 2019. The recovery of the GDP growth and investments shapes the revival of the wood-based materials market. In May 2020, the MDF production began to grow rapidly and exceeded its pre-crisis level in July 2020.

As the MDF market is predominantly a b2b-market, no dramatic changes are expected in the sales channels. However, online communication becomes increasingly important even in the b2b sales channels, with the use of distant negotiations and electronic document workflow. According to official statistics, MDF production indices rebounded in May 2020, which is a sign of MDF producers adapted their supply chains and sales channels to the “new normality”.

The decrease in furniture production in April 2020 against the increased demand for those products, led to a rise in furniture prices. With the recovery started in the second half of 2020, the growing demand shaped a prolonged increase in prices for wood-based materials, which reflected rising producer prices for furniture. If prices continue rising, it could hamper the demand for furniture as incomes are not expected to grow at that tangible pace. Should this happen, it may put a drag on the growth of the MDF market in the medium term.

Domestic Manufacturing Continues to Force Imports Out of the Market

The volume of MDF imports has reached its peak of approx. 3.5K cubic meters in March 2020 and amounted to $3.5M. Afterward, the MDF imports in Turkey experienced a sharp contraction since the outbreak of the pandemic in April 2020 due to the lockdown. In a broader context, this decrease continued a long-term contraction of imports which had been gradually displaced by domestic manufacturing. Over the whole of 2019, approx. 4.8M cubic meters of MDF were produced in Turkey, while purchases abroad decreased by -64.6% to only 20K cubic meters, falling for the seventh year in a row.

Affected by an intensive growth in domestic production, which will gradually displace imported products from the market, the share of imports decreased from 11% in 2007 to 0.5% in 2019 (IndexBox estimates). Turkey’s domestic supply is expected to continue its growth, thereby making the country a less attractive destination for suppliers from abroad. However, the potential for import substitution has been practically exhausted, forcing Turkish producers to look for new growth opportunities.

Furniture Boom in Western Countries May Become a New Driver for the Industry

The pandemic and the related isolation and remote working drive an increase in demand for furniture not only in Turkey but also in other countries. The U.S., for example, experiences a boom of suburban construction and relocation to country houses, which entails an increase in demand for furniture. This trend might be interesting for Turkish manufacturers with regard to searching for the most promising markets to boost exports.

In 2019, the amount of MDF exported from Turkey skyrocketed to 826K cubic meters, growing by 32% on the previous year’s figure. Overall, exports enjoyed a strong expansion, fuelled by rising domestic output. In value terms, it amounted to $283M.

Traditionally, the export of MDF from Turkey falls on the countries of the Middle East region. The largest markets for MDF exported from Turkey were Iraq ($57M), Iran ($32M), and Tunisia ($24M), with a combined 40% share of total exports. Increasing exports to countries with rising demand for MDF, e.g., the U.S., where the furniture and construction industries post solid gains over 2020-2021, can be an ambitious goal for Turkish manufacturers. Should this happen, it may become a new driver for the Turkish MDF industry.

Source: IndexBox AI Platform