Furniture trade gap keeps stretching wider.

As the world gets smaller, the U.S. furniture trade deficit gets bigger.

According to figures recently released by the U.S. Department of Commerce, U.S. imports of wood and upholstered furniture and wood furniture components reached a record $13.86 billion last year, up 13.7% from 2002. U.S. furniture exports, meanwhile, increased 22.4% over 2002 to reach $1.29 billion.

As a net effect, the U.S. wood furniture trade gap grew by $1.43 billion last year to a record $12.57 billion. To put things in perspective, the furniture trade deficit has more than doubled since 1996 and has increased almost five-fold since 1992.

The ever-increasing import numbers also reflect the ever-shrinking market share that U.S. residential furniture manufacturers retain on their home turf. By our estimation, domestic manufacturing accounted for slightly less than half of domestic furniture shipments last year.

Notes and Observations

The accompanying graphic highlights the 10 leading source countries of U.S. furniture imports and summarizes the U.S. furniture trade deficit for 2002 and 2003. A closer look at and behind the numbers reveals the following:

* China, which accounted for 8% of all U.S. imports in 1993, accounted for 40% of the import total last year. Its wood furniture exports to the United States increased by nearly $1.29 billion in smashing through the $5 billion barrier and settling in at $5.55 billion. Wood bedroom furniture, the subject of an antidumping investigation by the International Trade Commission, accounted for $1.41 billion of China's 2003 total, up 42% from the year before. (It will be interesting to check out first quarter trade statistics when they become available to see what impact, if any, the antidumping petition filed on Oct. 31, 2003, had on bedroom furniture shipments.)

* Despite the benefits of NAFTA and proximity to the United States, furniture manufacturers in Canada and Mexico have found it increasingly more difficult to increase their presence in the U.S. market because of the breathtaking charge of Chinese exports. Between 1990 and 2000, Canadian wood furniture shipments to the United States in creased six-fold from $359 million to $2.56 billion. Since 2000, when Canada last held the top spot of U.S. furniture import sources, Canadian shipments have declined 1% while Chinese shipments increased 120%. Mexico has shared a similar fate. Its furniture exports to the United States rose rapidly throughout the '90s from $174 million to $645 million in 2000. They have flattened out ever since.

* Italy, in spite of the escalation of the Euro, managed to post modest growth last year.

* Taiwan, which was the number one source of U.S. furniture imports up until 1993, continues to plummet in the standings. Since 1993 Taiwan's furniture exports to the U.S. have declined from $710 million to $245 million.

* Vietnam is on pace to crack the Top 10 list this year. As noted in a two-part report in Wood & Wood Products (December 2003 and January 2004), Vietnam is rapidly ramping up its furniture manufacturing capability. Vietnamese manufacturers figure to be the biggest benefactors if the antidumping tariffs are enacted against Chinese wood bedroom furnituremakers. Last year, Vietnam shipped $206 million of furniture to the United States, up 48% from 2002.

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How lean is your rough mill? That's the essential question that the Center for Forest Products Marketing and Management at Virginia Tech seeks to answer in a survey recently mailed to more than 2,500 Wood & Wood Products' readers.

The survey solicits responses from production and management personnel of larger woodworking operations, including those who produce furniture, cabinets, millwork, flooring and components. It will benchmark manufacturers' adoption of lean manufacturing systems and principles to control costs and improve rough mill operational efficiencies.