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BUSINESS JOURNAL
FEBRUARY 2013
Furniture industry looks to continue growth
or five years, we’ve been hearing about the “down economy,” the “fragile economy” and other similar terms. The Great Recession is still fresh on most people’s minds. Not that you could tell by looking at Wall Street. Last year was a very good year for investors in large-, mid- and small-cap stocks. How good was it? Consider: • The blue-chip Dow Jones Industrial Average gained 7.26 percent. • The S&P 500 index gained 13.4 percent in 2013, its largest annual return since 2009 and the fourth-largest in the past decade. • The Nasdaq composite index rose nearly 16 percent, compared to a drop of 1.8 percent in 2011. • The Russell 2000 index gained 14.7 percent. Also, 128 companies went public, the second-highest number of IPOs in the past five years. Unemployment, while still relatively high, is no longer in double digits.
All these numbers suggest the economic trends are going in the right direction. Yet there still is lingering economic uncerDENNIS tainty. It’s as if we’re waiting SEID for that other shoe to drop. We just don’t know when or how big it is. Maybe we got some idea at the start of the year. We pulled back from the fiscal cliff, but our nation’s debt, spending and revenue plans are anything but settled. Washington seems to be headed toward another gridlock. Uncertainty in Washington leads to uncertainty on Wall Street, and that’s not good for consumer or investor confidence. We can take a look at any sector of the economy and talk about how it can be affected by uncertainty. In Northeast Mississippi, it’s manufacturing – particularly furniture manufacturing - to which we’re
most attuned. It employs some 20,000 people directly and indirectly. There’s no doubt the recession took its toll on the industry. With the housing market taking a beating during the downturn, the furniture industry suffered mightily. Fewer homes meant fewer furniture sales. But we’ve seen good signs of recovery in housing, welcome news for the furniture industry. Last year, existing home sales and new home sales rose at the highest level since 2007. Furniture Today anticipates another good year. In its 2013 economic forecast, Furniture
Today said overall sales should grow about 4.3 percent, to about $87.8 billion. This year should be the fourth consecutive year of sales increases. In fact, should the numbers hold up, sales will be the highest since the peak years of 2006 and 2007, when sales reached nearly $92 billion. Those big numbers bode well for Northeast Mississippi as well. Long the “upholstered furniture capital of the world,” the region boasts of more than 200 manufacturers and suppliers that provide nearly a third of the nation’s upholstered furniture. Think about that: From our
little area of the Deep South, our region puts furniture in homes and offices from coast to coast. That, according to Mississippi State University’s Franklin Furniture Institute, leads to the furniture industry contributing $2.1 billion of the state’s $84.3 billion in total economic output. So all the signs are pointing in the right direction. Now if we can get Washington to cooperate, we can keep them pointed that way. Contact DENNIS SEID at (662) 6781578 or dennis.seid@journalinc.com.
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