The Urethane Blog

Furniture Market Sees Cost Inflation

Rising materials costs forcing manufacturers to pass-along increases

HIGH POINT — Caught in a spiral of rising raw material hikes, some of which threaten to continue through the remainder of 2018 and beyond, a number of furniture manufacturers are coming to High Point Market this month with a series of small pass-along price increases.

Discussions around the issue emerged at last October’s market driven by dramatic hikes in key product components, most notably TDI (toluene di-isocyanate) and polyol, which are used in the manufacture of foam. Many of those discussions continued throughout the remainder of the year with some manufacturers announcing late-year increases scheduled to take effect in January, only to be confronted with another round of materials increases earlier this year.

“Broadly stated, we’ve had eight years of no inflation, and it seems like they’re trying to make up for it in eight months,” said Kurt Darrow, La-Z-Boy CEO. “When all of the basic raw materials, lumber, steel, poly and now cover all have given the industry two increases in a six-month period, it’s impossible to ignore that.”Rob Spilman, chairman, president and CEO of Bassett Furniture, expressed similar concerns. “This reminds me of what I know about the inflationary days of the 1970s,” Spilman told Furniture Today. “We’ve had multiple foam increases. We’ve had plywood increases, and we’ve had steel and other metal increases. You do whatever you can to hold the line, but at some point you have to react and raise some prices. And as soon as you do you get hit with another one.”

The issue is most widespread in the upholstery business, where materials increases have been the largest and most frequent, dating back to the beginning of 2017 and threatening to continue throughout the remainder of this year.

“The biggest thing that we’ve seen is the effect of chemicals increases on polyurethane foam,” said Bill Wittenberg, president and CEO of Klaussner Home Furnishings. “The primary chemical in polyurethane foam is TDI, and cumulatively, from the beginning of 2017 to now, it’s gone up 94%. The other key component is polyol, and it’s gone up 24%.”

Read more here:  http://www.furnituretoday.com/article/552339-rising-materials-costs-forcing-manufacturers-pass-along-increases/