US furniture imports from China more competitive

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The decline in US consumer confidence affects furniture demand, but on the positive side unemployment remains low and wages are growing. The strong growth in home sales and new construction is excellent news for furniture manufacturers and retailers.

China‘s currency devaluation is expected to make furniture exports from China more competitive compared to US imports from Vietnam, Malaysia and Indonesia. At the very least a weaker yuan will offset the rise in labour cost in China. US companies that buy furniture parts from China for assembly in the US should also benefit from a weaker yuan.

The longer-term impact of a weaker yuan on furniture supply chains may be even more important than short-term price effects, according to the trade journal Furniture Today. Manufacturers in China will be less likely now to close plants and relocate to Vietnam or to other countries.

Exports of high-end furniture from the US to China have experienced strong growth in recent years, and the stronger dollar will force US companies to price their products more competitively. China‘s imports of US-made furniture increased by 59% between 2013 to 2014 to US$109.4 million.

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