As a result, we expect the sector to continue to improve the remainder of this year and anticipate another active year in 2016 particularly in the bedroom and dining room sectors.
NEW YORK--(BUSINESS WIRE)--Growth in the U.S. furniture industry continues to outpace the U.S. economy, due in large part to strong performances in bedroom and dining room furnishing sales. While housing continues to improve and discretionary spending increases, the sector should continue to improve through the remainder of the year and into 2016. These are some of the observations from Mike Hudgens, Southeast Regional Manager of CIT Commercial Services, a leading provider of factoring services and a division of CIT Group Inc. (NYSE:CIT), in “Furniture Industry Outlook: Growth in Sector Continues to Outpace U.S. Economy,” (http://www.cit.com/hudgens), the latest piece of market intelligence in a series of in-depth CIT executive Q&As.
“While the U.S. economy has remained relatively flat, the U.S. furniture markets have seen an uptick due in large part to new home sales and an increase in consumer spending as they look to furnish homes,” said Hudgens. “As a result, we expect the sector to continue to improve the remainder of this year and anticipate another active year in 2016 particularly in the bedroom and dining room sectors.”
Some of the other trends Hudgens expands upon include:
- China’s Currency Woes Could Positively Impact the Furniture Trade: China’s recent woes may have a positive effect on the furniture sector. Some furniture manufacturing has moved to other Asian countries, such as Indonesia and Vietnam, which has the potential to lower the cost for buyers – a potential benefit to U.S. consumers and U.S. importers.
- A Significant Interest Rate Hike Could Have a Negative Impact: The biggest fear is that interest rate hikes could slow down the housing market. The furniture sector has greatly benefitted from the pick-up in housing, so a significant and sustained slowdown there could be devastating to the industry.
- West Coast Port Shutdown Benefitted Sector: The lingering effect from the port shutdown earlier this year has forced companies to plan better for future disruptions. Companies are spending more on logistics to ensure they can take delivery of products sooner and are developing alternative shipping plans.
- Onshoring Is Losing Steam: The conversation regarding onshoring has changed over the last year. With a decline in fuel prices, the cost to ship goods overseas and labor costs, many companies are now reconsidering the benefits of onshoring. Many believe onshoring, the “Made in America” movement, may be slowing down.
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Founded in 1908, CIT (NYSE:CIT) is a financial holding company with more than $65 billion in assets. Its principal bank subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has more than $30 billion of deposits and more than $40 billion of assets. It provides financing, leasing and advisory services principally to middle market companies across more than 30 industries primarily in North America, and equipment financing and leasing solutions to the transportation sector. It also offers products and services to consumers through its Internet bank franchise and a network of retail branches in Southern California, operating as OneWest Bank, a division of CIT Bank, N.A. cit.com