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Tight supplies of tropical hardwood keep trade strong
The Hardwood Review Express reported that high prices and low availability of genuine
mahogany kept African mahogany and sapele trade strong. It also reported that
tight supplies of sapele and jatoba fueled price increases.
North American residential furniture market projected to increase in 2007
This article begins a four-part series about recent trends in the North American furniture market. It is based on the
research findings of the AKTRIN Furniture Information Center and analyzes the American residential furniture
market. AKTRIN research links GDP growth, personal income and housing starts to trends in American residential furniture demand.
Real GDP grew at a rate of 5.6% (annualized, seasonally adjusted) in the first quarter of 2006.
This positive picture changed significantly during the remainder of 2006, slowing down to 2.4%.
The American economy continues to show signs of weakness, and expected growth in 2007 is
only around 2%. This is the lowest rate during the past five years and compares to 3.3% last
year.
Personal income growth stood at 6.4% in 2006, up from 5.2% in 2005. In conjunction with less
robust employment growth in 2007, however, it could slow down to about 5.7% this year and
may even drop below the 5% mark in 2008. Growth of American consumer spending stood at
3.2% last year. Due to the sagging consumer confidence, it would lag behind the growth of
personal income. While last year¡¯s growth may be maintained in 2007, it is likely
to fall below the 2.5% mark next year.
The durable consumer good market is subjected to erratic fluctuations as such goods are quite
sensitive to interest rates and consumers¡¯ mood. Last year¡¯s average of 5.0%
was not likely to be repeated this year, and annual rates of 4% and below 2% are anticipated in 2008.
The annual value growth of residential construction amounted to 8.6% in 2005. Until mid-2006,
residential construction was strong, but declined thereafter. Last year as a whole it declined
4.2%. The housing market was still oversupplied and was predicted to suffer a decline of
15.8% this year and a decrease of 5% in 2008. In volume, this translates to 2.07 million new housing
units in 2005, 1.81 million last year and only an expected 1.46 million in 2007.
Furniture consumption in the US grew in line with disposable income at a rate of 6.1% in 2006,
up from 4.7% the year before. According to predictions of the AKTRIN Furniture Information
Center, this year it may slow to an anticipated rate of 5.7%. This would bring the market
value to about $ 88.575 billion this year compared to $83.818 billion last year.
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