The traditional North Carolina furniture industry has been experiencing drastic changes in the past decade. Competition from countries like China and the rising imports of furniture into the United States have led many furniture manufacturers in the state to shut down plants and lay off workers. Firms in the industry are being forced to rethink their corporate strategies in order to remain successful. More importantly, the industry's transformation into a global one raises many questions about government action and government policy. Should the government be intervening more aggressively in order to keep the industry, particularly within North Carolina, from withering?

General Industry Structure

Most consumers have a sense of what a piece of furniture constitutes, and yet the industry is a fairly complex industry, due partly to the diversity of materials used to create furniture and partly to the broad range of furniture used in our homes, businesses and institutions. There are three main types of materials used to make furniture:

  • Wood (which comes from sawmills and the forestry industry)
  • Metal (which comes from mining/metals)
  • Plastic (which comes as an output of the chemicals/plastics industry)

In addition, furniture is often divided into several different types, depending on the type of furniture used:

  • Home furnishings consists of most furniture used in the home; examples would be bedroom or kitchen furniture like beds and tables.
  • Office furniture includes functional furniture used around the office or workplace; this includes desks, filing cabinets, and cubicle walls, among others.
  • Institutional furniture constitutes furniture used in a variety of institutions, from schools to prisons to government buildings.


Furniture in North Carolina

History and Development

The furniture industry in North Carolina has been a major player in the state's economy for over a century. The origins date back as far as the seventeenth century when artisans of English ancestry began to settle across the state, producing simple yet functional furniture on a small scale. Early industrial entrepreneurs and developers focused on the Piedmont section of North Carolina, especially the city of High Point. The area was extremely well-suited for the furniture industry because of an abundant wood supply from numerous hardwood forests, above-average railway and highway transportation opportunities and the availability of cheap labor.1 By the 1980s, High Point had earned the nickname "The Furniture Capital of the World," and employment peaked at around 90,000 people in 1990. High Point hosted its first regional furniture trade fair in 1909; these events gradually evolved into High Point Market, an internationally-renowned furniture trade fair.

Unfortunately for North Carolina, the furniture industry began to feel the effects of increased foreign competition during the late 1990s. As competition increased and profits dwindled, many North Carolina companies either went out of business or were forced to consolidate by closing factories, laying off employees and importing products from overseas. Yet North Carolina still maintains a strong presence in this industry, with about 52,400 active employees. The bi-annual High Point furniture market alone draws more than 85,000 people to North Carolina every six months, and contributes around $1.2 billion to the economy each year.2 An estimate from 2004 indicated that the industry contributes around $2.8 billion annually to the economy.3

Geography of the Industry in North Carolina

Geographically, the industry remains concentrated in certain areas, especially the Piedmont Triad. Catawba County (which includes Hickory) has the highest employment in the industry with more than 11,000 people working in furniture manufacturing. Three additional counties (Caldwell, Guilford and Randolph) all employ more than 4,000, and two more (Alexander and Davidson) employ more than 3,000. Together, these six counties make up 63% of the entire state's employment in the furniture industry.4 Key cities include High Point, Thomasville, Greensboro and Winston-Salem, among others.

Key Players

Thomasville Furniture and Broyhill Furniture Industries, both owned by Missouri-based Furniture Brands International, are two of the most important furniture companies in North Carolina. Furniture Brands International is ranked as one of the top furniture companies in the United States, with sales of $2.4 billion in 2006.5 Klaussner Corporation, based in North Carolina, was ranked the fourth largest furniture supplier in the country as of 2004, though as a private company they do not release sales figures.6 Similarly, Lexington Home Brands had estimated U.S. sales of $167.3 million in 2006, and ranked as number 16 on the top 25 furniture sources list published by Furniture Today in 2004. Most of these companies are located within the Piedmont Triad region (primarily Guilford, Randolph, and Davidson counties), in the north central region of the state.


Recent Industry Trends and Developments

With the large decline in employment that has occurred in North Carolina's manufacturing sector, leading furniture companies are seeking new ways of staying competitive, focusing on increasing employment in higher-end sectors of the value chain. These include new manufacturing models, mergers, a renewed focus on design and emphasis on retail.

New Corporate Structures and Manufacturing Methods

Due to lower employment numbers and profits, many companies have merged with other furniture companies both domestically and overseas hoping to reduce costs as well as combine resources to gain a better position in the industry. Companies have begun implementing "lean manufacturing" methods which are meant to decrease production time and cost by maximizing the use of scarce resources, minimizing waste and increasing productivity.7 While these changes are by no means cheap or easy, they are a necessary shift to stay competitive.

Increased Focus on Branding, Marketing, Retail

In addition, some companies have focused on downstream links of the value chain, including design and retail. These links are not only higher value than manufacturing links, but may be more embedded in the US economy, as they depend on having intimate knowledge of US consumers and distribution networks. These are areas that furniture's international competitors, including those from China, may be less familiar with.

Foreign Firms Investing in North Carolina

Despite the many domestic firms shutting down operations within the US, another key trend is the growing number of foreign firms establishing facilities in North Carolina. The Piedmont Triad is one such NC area that contains many of the top furniture firms in the global industry. The importance of the Triad has caused it to become a destination for direct investment from foreign nations, with furniture companies based in countries like China, Italy, Spain, Germany and Canada now making their way to North Carolina to expand business. Therefore, even though many domestic firms have been cutting their workforce, the influx of investment from abroad has created many job opportunities for North Carolina.

Increased Competition for High Point Market

One other trend of note for North Carolina has been the rise of new competition for High Point Market. Large concerns were raised when Las Vegas announced their plans to open their own bi-annual home furnishings market. The first two markets, in July 2005 and February 2006, each had nearly half the amount of exhibitors and buyers than High Point's spring 2006 show. While current exhibition space in Las Vegas is still less than that of High Point, construction has begun and plans to have twelve million square feet of space, equal to High Point, will be finished within ten years.8 Many fear that the glitzy pull of Las Vegas will weaken North Carolina's market; others fear that they will lose West Coast buyers. More importantly, many worry that Asian manufacturers will prefer to do business in Las Vegas because of the city's closer proximity to Asia. New leadership in the High Point Market Authority is making changes such as improving registration, transportation, and accommodation pricing in attempts to make the High Point Market more buyer-friendly.9 High Point's most recent market, held in October 2006, drew 85,000 registrants, similar to recent years' statistics. Continued efforts to improve the overall quality of the Market, especially pleasing the buyers, must be the focus if North Carolina wishes to maintain their market presence.


Global Competition and Outsourcing

Foreign producers have been increasing the importation of wooden furniture to the United States. Although the U.S. domestic market has been dominated by North Carolina for many years, imports are surging. Furniture imports have risen from just under $9 billion in 1998 to more than $27 billion in 2006. Imports now represent a significant chunk of the domestic furniture market.10

The growth in imports has occurred at the same time that North Carolina has seen a decline in employment related to furniture manufacturing. Employment has been falling because of abundant cheap labor abroad. In 2004, an industry worker in the United States earned $14.24 per hour, while his Chinese counterpart earned about $0.69 an hour.11 Training and retention of workers is also much cheaper in China than in the United States. A final reason for the decrease in employment rates is the existence of environmental regulations, which sometimes can amount to more than 25 percent of the total operating costs in the furniture industry, including safety conditions for workers.12 Outsourcing of furniture products in the United States, which includes component parts, full production and assembly, has increased sharply. According to an earlier set of estimates, the value of activities outsourced jumped from $100 billion in 1996 to $325 billion in 2000; the figure is even higher today.13 This sharp increase is highly related to cheap labor offshore as well as tighter U.S. government regulations on environmental conditions. In response, U.S. companies are consolidating and closing their businesses, outsourcing heavily to China, or concentrating on the highest or lowest-end of production.14,15

Specific competition has come from a variety of countries, especially China, Italy, Mexico.

  • China: In only four years, from 2002 to 2006, the value of furniture production in China has nearly tripled in value, from just under $20 billion to just under $60 billion.16 As production has increased, China's furniture exports have experienced a similar boom. From 1997 to 2006, the value of furniture imported to the US from China has increased more than nine-fold, to hit $14.4 billion in 2006.17 The percentage of US furniture imports from China rose from 32% in 2001 to 50% in 2005. Due to a weaker currency and state regulations, Chinese manufacturers can produce finished products at much lower costs. In fact, the average wage of a Chinese furniture production worker is only four percent of the average wage of a worker in the U.S.18 This fact combined with China's modern, high-tech plants make them a huge threat to the stability of the industry in North Carolina. The US market's growing acceptance of ready to assemble (RTA) furniture, as well as the successful efforts of Chinese manufacturers to upgrade and improve the quality of production, both enabled Chinese gains. This upgrading was made possible both through joint ventures with foreign companies, and from key foreing production facilities founded in the late 1990s, including Valspar and Akzo Nobel. In response, many domestic companies chose to create alliances with Chinese companies, outsourcing jobs formerly based in North Carolina. Others chose to lobby for increased restrictions on Chinese imports, or even pursue legal action through anti-dumping regulations.
  • Italy: Italy is a global leader in the furniture industry, hosting some 37,000 companies and a total of 230,000 workers.19 With its capacity for innovation, the industry was able to realize €8 billion (approximately US $10 billion) in sales in 2004.20 In the US, imports from Italy have fallen due to the surge of Chinese imports. Italy has seen its share of US furniture imports to the US cut in half, decreasing from 8.1% in 2001 to 3.3% in 2006.21 Although trade with the US is falling because of the unfavorable exchange rates between the euro and the dollar, the Italian furniture market has compensated for this with sales growth in almost all other markets. The largest growth occurred in Russia where Italian sales have grown by 30% in recent years.22 Several top (and high-end) Italian firms, like Natuzzi, maintain a presence in North Carolina.
  • Mexico: The Mexican Furniture industry is largely fragmented and dependent on the US market. According to 2005 statistics, Mexico exports roughly 42% of its furniture production to foreign nations, 94% percent of which was sent to the United States.23 The Mexican furniture industry consists of approximately 82,000 different establishment with 98% having less than 50 workers.24 With the lack of large organized companies, the Mexican market has been unable to match the competition in the world furniture market. With China becoming the primary region to locate manufacturing plants, Mexico has seen its exports to the United States fall slightly, from 6.69% of the market in 2001 to 5.44% in 2006.25 With increased pressure from Chinese firms, the Mexican industry has yet to redefine its role in the world furniture market.



  1. John James Cater, "The Rise of the Furniture Manufacturing Industry in Western North Carolina and Virginia," Management Decision, Vol. 43, No. 6, 2005. pp. 906-924.
  2. High Point Market, "About High Point Market," Website, Last accessed August 6, 2007 []; Edward Martin, "Leaving Lost Wages." Business North Carolina, June 1, 2006. p. 33.
  3. Robert Lacy, "Whither North Carolina Furniture Manufacturing?" Richmond, VA: Federal Reserve Bank of Richmond, September 2004. p. 2.
  4. North Carolina Employment Security Commission (NCESC), "Labor Market Information." Last accessed on August 5, 2007.
  5. Furniture Brands International, Furniture Brands International Annual Report, 2003. Financial Section, p. 15.
  6. "Top 25 Furniture Sources for the U.S. Market," Furniture Today, May 10, 2004, p. 19.
  7. Thomas Russell, "Manufacturers Get Lean," Furniture Today, August 7, 2006. p. 47.
  8. Martin (fn. 2).
  9. Nancy Meyer, "Having High Hopes," HFN, October 16, 2006. p. 38.
  10. U.S International Trade Commission (USITC), Wooden Bedroom Furniture from China, Washington D.C, January 2004. p. 4.
  11. USITC, "USITC DataWeb." Last accessed August 5, 2007.
  12. Catherine Mater, "The U.S. Furniture Industry: Trends in Outsourcing and Emerging Certified Demand." Conference Presentation, "From Forest to Furniture: New Green Market Opportunities for China," September 12-13, 2001, Shanghai, China. Last accessed 17 October 2004. []
  13. Ibid.
  14. Ibid.
  15. A. Krishnan and P. Bonner, "A Fading Future: The Furniture Industry - A Pillar of the State's Economy - May Soon Be Gone," Durham Herald Sun, February 15, 2004.
  16. A. Krishnan and P. Bonner, "China's Factories Resemble NC's a Century Ago," Durham Herald Sun, February 15, 2004.
  17. David Robb and Bin Xie, "A Survey of Manufacturers Strategy and Technology in the Chinese Furniture Industry," European Management Journal, August 21, 2003. p. 484; Changling Zhu, "Chinese Furniture Trade: Market Control & Service," Presentation, International Consumer Product Safety Conference, Beijing, May 21-22, 2007. []
  18. USITC, "Dataweb" (fn. 10).
  19. Robb and Xie (fn. 16, p. 491).
  20. Italian Institute for Foreign Trade, "'Designer' Furniture," Website. Last accessed August 6, 2007 [].
  21. Ibid.
  22. USITC, "DataWeb" (fn. 10).
  23. Italian Institute (fn. 19).
  24. Michael Russo. "Background report on Mexican Furniture Market." Eugene, OR: University of Oregon, November 18, 2005. Last accessed December 3, 2006. [].
  25. Ibid.
  26. USITC, "Dataweb" (fn. 10).