Triad Furniture Manufacturing, 1998-2006

Furniture Manufacturing, Wholesale and Retail in the Triad Region, 1998-2006

The High Point University-sponsored report, The Economic Impact of the Home Furnishings Industry upon the Triad Region of North Carolina, projected that the 2006 total economic impact of the furniture industry cluster in the Triad Region was approximately $8.25 billion and over 65,000 jobs. This 126-page study, commissioned by the city of High Point, examined all direct, indirect and induced economic effects throughout Davidson, Forsyth, Guilford and Randolph counties. In extension to this analysis, the table below supplies an estimate of the trend in jobs and output (gross domestic product) among core furniture-related industries during 1998-2006. Furniture manufacturing output approached one billion dollars in 1998; but decreased to the lower-$900 million range in 1999-2000. Furniture manufacturing output declined further to the upper-$700 million range in 2001-2003, corresponding to the general slowdown of the US economy. Furniture manufacturing recovered in 2004 to around $900 million; but decreased to the $800 million range in 2005-2006. The reduction in furniture manufacturing output during 1998-2006 (-$140.34 million) was offset by increased output in furniture wholesale (+$84.11 million) and retail (+$69.78 million). The net effect was actually a gain of $13.55 million. Correspondingly, furniture manufacturing jobs decreased from 24,407 to 16,626 during 1998-2006, a loss of 32 percent. This decline (-7,781 jobs) was partially offset by job increases in furniture wholesale (+677 jobs) and retail (+626 jobs). The net effect was a decline of 6,478 jobs. Despite output and job fluctuations among furniture-related industries, total output and total employment in the Triad Region increased during 1998-2006. Total employment expanded, with some ups and downs, from 673,299 jobs to 697,536 jobs, a gain of 4 percent (+24,237 jobs). Total output increased from $34.8 billion to $40 billion, a substantial gain of 15 percent (+$5.19 billion). The changes in the Triad Region economy are part of a national and global pattern. As the economy grows, the distribution of jobs and output have gradually shifted from manufacturing toward other industries, such as wholesale, retail and other services including finance and health care. This trend is partly because of technological advance that allows fewer workers to manufacture more goods, and also because of more trade imports of manufactured products (including furniture) from lower-wage developing countries into higher-wage developed countries. TABLE: Real GDP (in $ millions) and Jobs for Furniture Manufacturing, Wholesale and Retail in the Triad Region, 1998-2006 , g n i r u

l t i g c a t n a i

f e r s n e u , u r R b o t n

g i u o c t a n g & i i J a

r e n f n M e b r e e u o l u

R l i t r o e e u e

a n g r a r r c g u J

d F s a t

n s u u u a e i l i e t a t t f i e l r i i e i i d l n M l R r u a r a u n n n a o t o t i r r r n T s e u d r h e c h r u u u a e P F a l T a i u R F F F f W t

r W M o D

u T & d h d d n a G e e

D n i r s

a a a r r r l i i i e a W u b l G r r r u u a T

t t o l F a i i T M T T s e

J s a n n

b P P P d r r R l e e

l o a l u u a D D D i t R J o r a F F t G G l G l o

h i T i

l l l o d d T s a a W a a t a t T a a b i i e e e e e r r Year o R R R R J T R T $1,276.6 $34,828.9 1998 $970.33 $127.49 $178.80 2 5 24,407 1,512 3,330 29,249 673,299 $1,288.0 $36,618.5 1999 $939.30 $125.44 $223.28 3 9 23,719 1,692 3,915 29,326 684,533 $1,275.0 $36,996.6 2000 $908.70 $131.50 $234.87 7 2 24,061 1,673 4,211 29,945 691,778 $1,154.7 $36,857.7 2001 $752.32 $155.71 $246.72 5 8 22,397 1,986 4,370 28,753 678,500 $1,223.3 $37,282.8 2002 $777.55 $207.17 $238.67 8 6 21,006 2,169 4,188 27,363 670,905 $1,208.8 $37,686.3 2003 $789.75 $182.99 $236.09 3 4 18,180 2,112 3,868 24,160 672,568 $1,340.8 $38,652.7 2004 $903.00 $203.11 $234.69 0 4 17,177 1,998 3,664 22,839 682,255 $1,288.0 $40,016.1 2005 $811.54 $211.88 $264.58 0 0 16,626 2,202 3,796 22,624 697,538 $211.6 $248.5 $1,290.1 $40,015.8 2006(p) $829.99 0 8 7 8 16,626 2,189 3,956 22,771 697,536 $change (98-06) -$140.34 $84.11 $69.78 $13.55 $5,186.93 -7,781 677 626 -6,478 24,237 %change (98-06) -14% 66% 39% 1% 15% -32% 45% 19% -22% 4% SOURCES: Estimates of Real GDP extrapolated from data at the Bureau of Economic Analysis and County Business Patterns (Real GDP measures final goods adjusted for inflation; base year is 2000). Jobs data is from County Business Patterns. NOTES: The values in the table vary from projections in The Economic Impact of the Home Furnishings Industry upon the Triad Region of North Carolina because of different data sources and measurements. 2006 projections based on exponential smoothing. A county breakdown of this trend is at www.highpoint.edu/~jfox. Gerald Fox, Ph.D. is Associate Professor of Economics in the Earl N. Phillips School of Business at High Point University, and author of “Part A” of The Economic Impact of the Home Furnishings Industry upon the Triad Region of North Carolina.