U.S. leads world’s $307 billion production market

While low-cost imports continue to challenge the U.S. furniture industry, worldwide production of furniture is worth about $307 billion in U.S. currency, with the United States in the lead at 21 percent of total production. These findings are part of the World Furniture Outlook 2008/2009. The estimates are based on information from national and international official sources.
The seven major industrial economies, the United States, Italy, Germany, Japan, United Kingdom, Canada and France, comprise 50 percent of the world’s total production. Sixty-five percent of the entire world’s production is from developed countries with 35 percent coming from emerging countries, with China being the highest at 18 percent. China and Poland have had rapidly increasing production thanks to newly built plants.
The degree of openness in the furniture markets, or the ratio between imports and consumption, rose from 20 percent in 1997 to 30 percent in 2006. This increase was important in the United States, where the trade deficit was nearly $22 billion. From 1997 to 2007, the United States had an imports increase from $8.6 billion to $26 billion. U.S. imports presently are leveling off.
International trade of furniture has grown faster than furniture production and faster than international trade of manufactures due to the opening on the main furniture markets in the past 10 years. In 2008 and 2009 the world gross domestic product will continue to grow at a fast pace along with international trade of manufactures. World trade of furniture is expected to grow by 15 percent in 2008, and might amount to $121 billion.

The economy will turn more positive in the latter half of 2009

This is not a fun time to be forecasting the economic outlook for 2009.
Not only are the prospects dim, but uncertainty is at an all-time high. One thing is certainly clear: the U.S. economy slowed in 2008. Economic activity in the third quarter declined 0.3 percent, the worst performance since a 1.4 percent decline in the third quarter of 2001 (thanks to the Sept. 11 terrorist attacks).
Add the turmoil in the financial markets and the current freeze in credit to this weak economic scenario and the outlook is clearly grim.
In fact, economists generally expect economic activity to slow even further into early 2009. For 2008 as a whole, economic growth is likely to average just 1.6 percent, followed by a very sluggish 1.0 percent expansion in 2009.
But the economy will turn more positive in the latter half of 2009. The Congress and the Federal Reserve have initiated a number of stimulus measures that, while taking time, will begin to be felt by the middle of 2009.
The Federal Reserve has lowered interest rates to just 1.0 percent (like they did following Sept. 11), which should stimulate economic activity once the credit markets thaw. That thaw should occur in early 2009 thanks to the Congress’ and the Fed’s efforts to shore up bank liquidity and build confidence in the banking system.
So, by the second half of 2009, GDP growth could reach 2 to 3 percent — almost back to the economy’s long-term growth potential. Although it will be a long, hard ride in getting there, the path should be much smoother by this time next year.