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Furniture rebound a sign of strengthening economy?

TUPELO — Sales of furniture in the U.S. are heavily dependent on the economy. So the fact that the spring Tupelo Furniture Market was considered the best market ever is an encouraging sign that the economy is improving.

The market attracted approximately 25,000 attendees this year, and has a long-term impact estimated in the hundreds of millions of dollars. Tupelo is considered the upholstered furniture manufacturing capitol of the U.S., and the Tupelo Furniture Market is the second-largest furniture trade show in the country.

“The market has a huge economic impact,” said Bill Cleveland, president of the Tupelo Furniture Market. “The spring market went very well. We think it was our best market ever. Part of that was a result of the overall economy improving. The retailers came to market and bought furniture, which is what our manufacturers live on. We feel like it is confirmation that the economy is back strong.”

Cleveland noted no significant new trends as far as what types of furniture are the most popular. Sales seemed strong across the board for all different kinds of furniture.

“A lot of our manufacturers are growing, and that is healthy for them and us, as well,” Cleveland said.

Imports a concern

Cheap imported furniture is a concern for Mississippi manufacturers. Many of the state’s job losses in manufacturing overall have been attributed to cheap imports from overseas. But imports aren’t all bad for furniture manufacturers in the state.

“Local companies are experiencing tremendous growth because they are importing,” Cleveland said. “It is a ‘good news, bad news’ thing. Exporting jobs is obviously not a good thing for our country or our state. But the fact is the ability to import other categories of furniture is helping a lot of our local manufacturers grow and prosper. This is the time for all of us to work together to keep the furniture industry healthy in Mississippi.”

Currently a proposal is working its way through official government channels to make Tupelo a Foreign-Trade Zone (also known as Free Trade Zone), which allows items to be stored, exhibited, repackaged, assembled or used for manufacturing free of customs duty, quota and other import restrictions until the goods enter the U.S. market. Cleveland said the Foreign Trade Zone proposal is being supported by most local people involved in the furniture industry.

Mary Werner, vice president of Tupelo Manufacturing Company, said imports are the biggest concern on the horizon for companies like hers, which is owned by Werner and her husband, Charles.

“I am 100% American made,” Werner said. “I don’t do any imports. I’m made with solid oak. I can’t make a $35 all wood chair.”

Tupelo Manufacturing Company is the only contract furniture manufacturing operation in Tupelo. The company makes furniture for nursing homes, college dormitories, hotel/motels and other commercial businesses. Werner said their business has been up significantly this year.

‘Business is fabulous’

“My business is fabulous,” said Werner, who is also the second vice chairman for the Tupelo Community Development Foundation (CDF). “I couldn’t be happier. The last couple of years the colleges have not been replacing a lot of furniture. This year they are replacing furniture like beds and chairs. Nursing homes are upgrading. For my company, it has been very positive. Is the economy improving? Absolutely. And people’s outlooks have improved. I do think a lot of it has to do with tax cuts, and people having a little extra money. They’ll spend it on one thing, and it sort of trickles all the way down.”

High prices for steel products in the U.S. have been attributed in part to China buying a lot of the scrap metal in the U.S. Werner said China is also buying a lot of oak from the U.S.-which drives up prices for manufacturers in the U.S. Chinese purchases of American wood is becoming an issue for U.S. furniture manufacturers, Werner said. Tupelo Manufacturing makes a lot of what is called “show wood,” which means the wood is exposed rather than being covered up with upholstery. While she can’t compete with imports on price, she does believe it is possible for companies like hers to compete on other factors.

“I happen to believe in the global economy,” Werner said. “I think if I can’t compete with them on price, I should be able to compete with customers service, delivery time and response time. There is a way to compete. People who want the cheapest furniture aren’t going to buy from me anyhow because I’m not the cheapest. As far as me going head to head on imports, if their price is cheaper, I’ll give better customer service. I know what my quality is. I know when it was built and how it was built. I don’t mind putting my money where my mouth is as far as warranties go. We pride ourselves on a quick response if there is a problem. Let’s face it. As hard as you try, it isn’t always going to be perfect. When it isn’t perfect, we make sure the customer is happy. It is hard to do that when you have imports.”

Innovation an asset

CDF president David Rumbarger said that many feel that the only savior for U.S. industry is America’s ability to innovate and invent in a relentless quest for a better way.

“That ingenuity will be called on now more than ever,” he said. “By its very nature, it is hard to predict innovation because it is a wonderful surprise.”

Rumbarger said there is deep concern about outsourcing jobs and manufacturing to China and how American manufacturers will and must continue to improve their products and processes to compete worldwide.

“National publications predict that further outsourcing and job shifting will occur, and that institutions like the Congress and administration will have to become more involved in the economic transition that is going on,” Rumbarger said. “They must continue to review the situation and act to help American workers compete with new job skills. I believe that Congress could broaden workforce training to include more skill-based training and computer training for technology jobs. They could make funding more flexible for companies to use to train workers before skills are outdated. They could also encourage capital spending on equipment and technology to help U.S. companies remain competitive with global competitors.”

He said Northeast Mississippi has built its economic model on landing and expanding manufacturing jobs. Manufacturing has high economic multipliers, meaning the purchases and wages paid by manufacturers have a multiplier effect when spread out in the community. Another benefit of manufacturing for Northeast Mississippi is that it fits the skill sets of the workforce.

“In the future, skills and education will stand successful communities apart and be a certain predictor of a community’s economic success,” Rumbarger said. “Tupelo/Lee County continues to set the pace for Mississippi’s manufacturing sector. Itawamba Community College and Three Rivers Planning and Development District have set the model for workforce training. With these forward-thinking initiatives, our region will continue to be a contender for new jobs and capital development.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

About Becky Gillette

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