Furniture industry expects to stabilize, maintain presence

By Dennis Seid/NEMS Daily Journal

Northeast Mississippi, which built its way into a furniture-making bastion decades ago, is undergoing the stresses and strains other manufacturing sectors have faced.
But area leaders say no one is giving up on the industry, especially with the arrival of Toyota and the automotive industry.
“With Toyota, the suppliers and with furniture where it is and all the new things going on, I think there’s a whole lot left to do for us to take advantage of the opportunities,” said Randy Kelley, executive director of Three Rivers Planning and Development District in Pontotoc.
Kelley said it’s critical that existing industries and businesses – especially the furniture industry – are nurtured and supported. They tend to provide the bulk of new jobs.
“There’s no doubt that Toyota and the automotive industry, together with our strong support of our existing industry, will continue to grow our economy,” he said.
And for a region suffering double- digit unemployment rates for nearly two years, jobs in any sector are welcome.
The downturn in furniture industry employment is related to globalization, where free trade is advocated between countries to improve the flow of goods, services and, of course, money.
But while globalization has opened new opportunities for trade, it has simultaneously introduced new pressures on sectors unaccustomed to it.
Billed as the “upholstered furniture capital of the world,” Northeast Mississippi enjoyed a dominance that was rarely challenged until the turn of the century.
But warning signs emerged in the late 1990s indicating that cheap labor overseas, particularly in China, would present the biggest challenge.
Furniture companies in the region had seen their primarily wood furniture-making counterparts in North Carolina get waylaid. There, furniture employment peaked at about 90,000 in 1990. By 2006, that number had fallen to about 52,000. It’s even smaller today.
Because upholstered furniture isn’t as easily transported as components for wood furniture, companies in Northeast Mississippi were able to weather the storm a little better.
But that didn’t mean the industry was completely sheltered.
In fact, since March 2002, the state has shed more than 11,200 furniture jobs, the vast majority of the losses coming from the region.
According to a 2009 report by the Franklin Furniture Institute at Mississippi State University, the furniture industry ranks second in total state manufacturing employment and fifth in national furniture employment.
About 150 companies provided an annual payroll of $673 million and $3.3 billion in furniture and related product output.
But the recent recession and the implosion of the housing market did little to help the furniture industry, however. With few homes being built and bought, there were fewer shoppers looking to buy furniture. Buying patterns also changed, with flat-screen televisions and other high-priced electronics vying for what little disposable income there was.
That resulted in further contraction of the industry, both at the manufacturing and retail level.
The trickle-down effect was felt in Northeast Mississippi.
Since 2009 alone, 2,900 furniture industry jobs have been lost, although manufacturing additions and expansions in recent months have cut the net loss closer to about 1,800.
Maintaining support
“We’re not out of the woods yet,” said Mississippi Furniture Association President Ken Pruett, “but we’re going to need a lot more expansions to make up for what we’ve lost.”
Pruett estimates about 18,000 people are directly employed in furniture manufacturing, with thousands more indirectly employed to bring the total to about 30,000 workers.
He does see some other good news. The cut-and-sew incentives law, passed last year, has brought back about 750 of those jobs, bringing the total to about 4,000 now. Two years ago, Gov. Haley Barbour vetoed the bill, but signed it last year after some compromises.
“It’s too bad we couldn’t have it the first year,” Pruett said. “Imagine how many more jobs we could have saved. But I’m glad we got what we got. Now we just have to build on it and create more jobs.”
Pruett welcomes with open arms the arrival of Toyota and its suppliers.
“The ripple effect will be good,” he said. “We’ve supported them all day long, but they won’t fix all our needs. About a third of our manufacturing is still tied to furniture, and we’re going to continue to be furniture-centered for a while.”
David Rumbarger, president and CEO of the Community Development Foundation in Tupelo, said the automotive industry will benefit all manufacturers, including the furniture industry.
“Manufacturing’s our base,” he said. “The auto industry helps everybody in manufacturing because it focuses on advanced manufacturing.
“It helps the furniture industry because it allows them to go in a new era of manufacturing and will help them have the work force that will make them more competitive.”
Contact Dennis Seid at (662) 678-1578 or dennis.seid@journalinc.com.

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