Updated spending forecasts
The casual furniture industry represents only a fraction of the overall home furnishings market, but the niche often is like an upstart child with a mind of its own. It wants to stay outside when told to come out of the rain.
Furniture industry analyst Jerry Epperson had expected 2011 to be a little healthier than it has turned out to be. His new forecast calls for a 2.9% increase in U.S. consumer spending on furniture and bedding this year - much of it due to price increases rather than real growth. U.S. unemployment percentages stayed high as too few jobs were created in 2011. GDP growth was slower than expected and the modest recovery in housing starts was mainly in the multifamily category while single-family starts declined a bit.
"We do not expect a double-dip recession, but agree with many that it has a 25% to 30% chance of occurring, most likely in early 2012 - if at all," according to Epperson of the Richmond, Va.-based Mann, Armistead & Epperson firm. U.S. economic growth will reach or exceed 3% next year and will finally "give the economy a perceivable level of growth."
More gradual improvement is expected in 2014 and 2015 when unemployment is forecast to finally decline to 8% or lower.
Epperson is looking for gains of 4% in U.S. consumer spending next year, leading up to a 5.7% increase in 2013. "Without the distraction of the presidential election and with stronger existing home sales (above 5 million units), we expect the closest to ‘normal' activity the home furnishings industry has seen in almost six years," he said.
Consumer spending, the broadest measure of industry retail activity, should continue growing at 4.1% in 2014 and 5% in 2015. The spending figure is projected as $83.3 billion this year and is forecast to top $100 billion in 2015.
Again, we all know the casual industry is a relatively small piece of the overall home furnishings pie.
As I pour over this sea of numbers, I'm reminded of the jumble of alphabet soup that children gobble down with the eventual end result of increased inches on growth charts. Now if we can push past all the wacky weather around the country that knocked sales down this year, we should be able to come out of the rain and get back on track for steady growth.