Consumers want American-made furniture, giving domestic producers a fighting chance.
Consumers see the “Made in the USA” label, John Strauss says, and “they feel good about it.”
It conjures up patriotic sentiment. They feel it tells a story about the American workforce and allows them to take part in that story.
Strauss looks at “Made in the USA” on a product and also sees simpler logistics, good customer service and, above all, a “mark of quality.”
“It means this is not some generic company someone can’t relate to,” said Strauss, founder and owner of Canton, Ohio-based John Strauss Furniture Design. “We have a quicker turnaround time. We’re able to make custom products. We never have trouble shipping things. Everything is shipped out of Ohio by truck. You’re not dealing with the Panama Canal. You’re not dealing with ports. That gives people more certainty when it comes to time of delivery. And people relate to it being made in America. It’s meaningful.”
Recent tariffs on Chinese-made goods have sparked talk of a trade war, and some American furniture makers are concerned about the rising costs of the components they import.
But the climate for domestic manufacturing right now prompts good feelings, too.
“It’s pretty solid overall,” said Ben Copeland, director of sales and marketing at Vermont-based Copeland Furniture. “We just finished a 2018 that was a record year of sales for us. I attribute that in large part to an overall strong economy. But you’ve seen a building trend in the last seven or eight years where interest in American furniture has been on the rise. For the better part of two decades, the trend was going against us. American furniture manufacturing was built on a culture of quality, and lately there has been a groundswell in consumer sentiment for that.”
“American furniture manufacturing was built on a culture of quality, and lately there has been a groundswell in consumer sentiment for that.”
– Ben Copeland, Copeland Furniture
According to the U.S. Bureau of Labor Statistics, about 467,000 American workers were employed in furniture and related product manufacturing in 2017, up from 410,000 five years earlier.
Furniture imports have remained steady in recent years. According to figures from the American Home Furnishings Alliance, imports made up 45.7 percent of upholstered furniture and 85 percent of wood furniture sold in the United States in 2016, compared to 46 percent and 84 percent, respectively, in 2015, and 44.1 percent and 82.3 percent in 2014.
Forty years ago, however, less than 10 percent of furniture sold in the United States was imported, said Jerry Epperson, a furniture industry analyst and a managing director of the research firm Mann, Armistead & Epperson. And much of what was imported then was specialized furniture of the sort that domestic manufacturers didn’t produce, or items that were geared toward immigrant communities.
In the 1980s, imported occasional tables and dining furniture, which could be shipped unassembled, began showing up on the market.
“And in the ’90s, as we began to get more and more containers going back to Asia empty, the Asian factories learned they could buy their lumber here and not use the limited quantities they had available,” Epperson said. “They began building with our lumber, which was a huge advantage to them. And then they got into fabric upholstery in a big way in 2002, and they started setting up factories with their own looms to make their own fabrics.”
In September 2018, the U.S. Trade Representative’s office announced a 25 percent tariff on an estimated $200 billion worth of Chinese goods (including furniture). The tariffs were to take effect on Jan. 1 but were postponed until March to allow for discussions between Chinese and American officials.
With the deadline looming, some Chinese manufacturers are looking to set up production facilities in the United States, Epperson said.
“The domestic costs of operating a business are just more expensive.”– Jerry Epperson, Mann, Armistead & Epperson
Domestic companies have seen a pick-up in their business, he said, but it’s not yet an overwhelming one. All other things being equal, he said, consumers prefer buying goods made in America. But, if there’s a significant styling and especially price difference, they’ll take those factors into consideration.
“The domestic costs of operating a business are just more expensive,” Epperson said. “You look at wood manufacturing. Most of our remaining domestic wood manufacturers are really artisans. They’re making smaller lots of specialized furniture. They’re not making long production runs, like the Chinese tend to do.”
Yet, domestic manufacturers that make upholstered furniture with custom features have done fairly well, Epperson said.
“They can deliver that customized product quickly,” he said. “If you’re a retailer and you get a customer who comes in and wants a particular sofa, you can have it made in the U.S. and get it to them in about 30 days, or you can have it made overseas and it will probably take the 30 days to make, plus six weeks transportation. The domestic sofa might be more expensive, but you’ll get it sooner.”
Roy Calcagne, chief executive officer of Hiddenite, N.C.-based Craftmaster Furniture, said about 65 percent of his company’s output is for custom orders.
“A dealer might have a fabric wall with 1,000 choices, which is what we have in our line,” he said. “And if someone orders a sofa with one of those fabrics, we typically will ship it within two to three weeks. Overseas manufacturers don’t typically have that type of selection, they can’t do those types of lead times. We try to get it out as soon as possible, and that gives us a competitive advantage.”
“As people see price increases on imported items, that’s going to level the field a bit with price.”– John Strauss, John Strauss Furniture Design
American furniture makers in recent decades have had difficulty competing on price. According to a Reuters/Ipsos poll conducted in 2017, 70 percent of Americans felt that buying American-made goods was somewhat or very important. However, close to 50 percent said they were willing to spend only up to 10 percent more for those items. Thirty-seven percent said they weren’t willing to pay anything extra.
But Strauss said that if the higher tariffs kick in, he expects domestic products to become more competitive.
“We’ve always told people we have other advantages – with shipping, with custom,” he said. “But as people see price increases on imported items, that’s going to level the field a bit with price.”
Chinese tariffs, instituted in retaliation for American tariffs, might also end up helping some domestic producers.
“China has bought huge amounts of American lumber, particularly high-value species like cherry and walnut,” Copeland said. “The biggest driver of market prices on U.S. lumber in the last 15 years or so has been China. But now they’ve placed tariffs on that lumber, which resulted in a pretty big dip on lumber prices here. So there’s been reduction in our raw material costs.”
David Jacobs, president of Statesville, N.C.-based Dixie Seating, said recent trade policies have opened some additional opportunities for his company.
“We’re actually getting some interest to make furniture for other companies that are selling in the U.S. market,” he said.
But other manufacturers have expressed concerns about the costs of some materials they use. A great deal of fabric, for example, comes from overseas.
“There was a time, even 15 years ago, when most fabrics were domestic,” Calcagne said. “But today about 70 percent of the fabrics in our industry are made in China. And depending on the composition of those fabrics, the majority of those would be tariffed. So that’s one negative.”
Even though domestic furniture might cost more, Copeland said that for many consumers the “Made in the USA” brand also connotes good craftsmanship.
“The wave of imports was really defined by a rush to bring the lowest possible price,” he said. “And in that, they were stripping out a lot of the quality of the product. That’s certainly not to say that a lot of those manufacturers are incapable of building a quality product. The furniture Chinese manufacturers make for their domestic consumers tends to be of a very high grade. But they tend to export lower-quality, price-oriented products.”
Many consumers, he said, also regard “Made in the USA” as a reflection of their personal values.
“They see it as beneficial to the national and local economies to buy something that’s made nearby,” Copeland said.