HIGH POINT — Chatter about rising energy and materials costs is reaching fever pitch, and behind-the-scenes, notices of price increases are starting to arrive, further impeding what many hoped would be a year of recovery as the industry readies itself for High Point Market.
A quick look at gasoline prices alone highlights the fuel increases that have rocked business and consumers since the Iran war began. Using Global Petrol Prices as a source, Investor Sight has reported that Vietnam has seen the highest increase in gasoline prices with a 50% uptick. In the U.S., the percentage increase is 16.6%, while China follows with a 10% increase.
The rise in gasoline costs is only one area where industry and consumer are feeling the same pinch. Overall increases in fuel costs are also significantly impacting materials with everything from fabrics to foam under scrutiny.
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In documents provided to sister pub Furniture Today, one fabric supplier has sent notice of an additional 5% fuel surcharge on all new orders for goods not currently in inventory. The surcharge is scheduled to go into effect in June and accompanies a warning that there could be delays in product delivery due to shortages of oil and fuel reaching the mill.
Global furniture manufacturers are also reaching out to alert customers to price increases effective almost immediately.
Additional documents provided to Furniture Today highlight increases from one factory based in China that has implemented an 8% price adjustment beginning in April, attributed to raw materials cost, and another from a Chinese factory documenting a 5% price adjustment due to raw materials price increases. In a separate off-the-record conversation, another factory is requesting a 9% increase due to rising materials costs.
Materials increases span upholstery and case goods, according to another document obtained by Furniture Today. MDF and solid wood have increased 15% to 17% in recent months, while foam and paint have increased between 15% and 20%.
Labor costs are also increasing, according to numerous sources. In addition, one source stated that many factories are concerned about shutdowns due to rising energy costs, dramatically impacting production, supply and delivery.
Discussing obstacles to a full industry recovery, Josh McKay, vice president of sales for Kalalou, said, ““We’re going to extraordinary lengths to remove any obstacles. That started with tariffs and our decision to minimize the impact as much as we could. In fact, unlike many of our competitors, we have not added a surcharge at any point. Additionally, spreading our eggs across nine different baskets by producing in multiple countries around the world has benefited us and our customers, allowing us to spread additional costs over a much larger offering. It has enabled us to make the pricing far more palatable.”
