Furniture imports from Mexico rose 5% to nearly $1.2 billion in 2019. Here a worker is seen finishing a drawer interior at International Furniture Direct’s new plant in the Puebla region of Mexico.
HIGH POINT — Furniture imports fell 8% in 2019, marking the first drop since 2011 and one that industry experts will associate largely with the disruption caused by China tariffs that affected every major product category.
While shipments rose significantly from major furniture producing countries such as Vietnam and Malaysia, they nowhere nearly made up for the nearly $4 billion decrease in shipments from China.
“Where is all the business from China? We are not seeing it in Vietnam and Malaysia,” said Greg Noe, president and chief operating officer of Bernards Furniture Group. “The bottom line is we had a $4 billion loss from China. Part of it is (a drop) in business, and part of it is the movement of goods. What I hear is that the demand is not there.”
Furniture shipments to the U.S. last year were $23 billion, down 7% from $24.8 billion in 2018. China saw the largest drop in dollars overall, with shipments down 28% to $9.7 billion from $13.6 billion in 2018.
Seven other countries in the top 10 largest shippers actually grew their shipments, led by Vietnam, which rose to $5.7 billion in shipments, up 35% from $4.2 billion in 2018.
In order of importance, it was followed by Canada, which was up 3% to $1.32 billion from $1.29 billion; Mexico, up 5% to $1.2 billion, from $1.1 billion; and Malaysia, up 28% to $942.6 million from $739.3 million.
As Noe noted, however, such numbers hardly made up for the entire $4 billion difference coming out of China.
Meanwhile, Italy’s shipments fell 1% to $843.1 million from $855 million; Indonesia was up 13% to $751.7 million from $664.6 million; and India was up 7% to $376.8 million, from $350.6 million.
Poland, considered by some to an emerging player in the realm of global sourcing, saw a 13% drop, with shipments of $265 million, compared with $303.8 million in 2018. Taiwan’s shipments rose 12% to $226.7 million, from $201.9 million.
Where increases are
Taiwan certainly captured some business from China, particularly due to its capabilities in pieces using mixed media elements, particularly chrome and glass. While Taiwan production is said to be much more expensive than China, the pricing gap narrowed significantly due to 25% tariffs.
Increases in other countries also were due to shifts in sourcing, most notably to Vietnam, but also to Malaysia, which has proven to be a reliable source for promotionally priced upholstery. It also has become a major player in promotionally priced laminate bedrooms.
India also has become a more important resource, particularly for solid wood furniture made with indigenous species such as acacia, sheesham and mango. Mexico and Indonesia also have become reliable alternatives to China also thanks to their use of solid wood, mahogany in Indonesia’s case and solid pine in Mexico.
Vietnam, however, gained the largest market share not only due to its capabilities in wood furniture production, but also in stationary and motion upholstery.
One of the resources that shifted its production to Vietnam last year was case goods importer Legacy Classic. Before then, its line was produced in China. But even before tariffs became an issue around the summer of 2018, the company had been making plans to shift its sourcing.
“It has gone from one place to the other; what has gone down in China has gone up in Vietnam,” said Don Essenberg, president and CEO of Legacy Classic of the shift from China to Vietnam. “Our business was up 100% (from Vietnam). We went from mid 2018 with 100% of our product in China to mid -2019 with 100% of our product in Vietnam.”
Categories it shifted include bedroom, dining room, some occasional as well as youth furniture.
“It was a real learning curve for us last year, but by the end of the year, things were smoother than during the transition,” he said.
Moe Samieian Jr., president of full-line resource Moe’s Home Collection, said that the company saw increases in shipments from Vietnam and India. However, he believes that most of the industry’s China related tariff shift was to Vietnam as evidenced by the numbers.
“I don’t think India is as affected,” he noted. “That business … rarely moves from China to India. Most of it has to move from China to Vietnam or to Malaysia. I think that Vietnam was the No. 1 place that people moved things to.”
For Moe’s, one of the big areas of growth in Vietnam was upholstery, including sofas, loveseats, sectionals and some accent chairs. Samieian said the company probably saw 40% to 50% growth in Vietnam in those categories alone.
However, he said, said the company’s business out of India was strong due largely to its availability of solid wood species such as acacia and mango used throughout its line.
“They are also good in metal,” he said. “We do a lot of business there because the materials work with our style product. We have grown in India for that reason.”
Noe, of Bernards, said that the company saw growth in both Vietnam and Malaysia in 2019, most of which was in the bedroom category.
“The biggest loss for me was in dining room and occasional,” he said. “They were being made in China, and we shifted some of them, but the costs were 25% to 35% higher. I probably lost 50% to 60% of my business sin those categories. The demand would still have been there if I could have moved them at the same price, but the price was prohibitive.”
Jamie Collins, executive vice president of case goods and upholstery importer Homelegance, said that the company saw an uptick in shipments from Vietnam and Malaysia last year. Some of that was the shift in products from China such as day beds moved to Malaysia, accent chairs moved to Vietnam, and motion upholstery moved to Vietnam and Malaysia.
“They are getting there,” he said of the other countries producing the same type quality as China in various categories. “So many industries have been affected by tariffs placed on China, it makes it that much harder to get facility space and workers, particularly in Vietnam. That has been the challenge as Vietnam has grown.”
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