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      - page 13 / 47

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China

Paint Adhesives Upholstery

Quality Control

($593 million)

Machinery

Sawmills

Seeds

Forestry

Chemicals

Upholstery

Furniture Manufacturers

($20 billion)

Distribution Retail

Design

Logistics

Lumber

Where in this supply chain does the United States have an advantage? American companies specialize in high-value added activities such as chemicals, seeds, upholstery design, machinery manufacturing, and the design and advertising of the final product. Abundant natural forests and land also allow the United States to specialize in production of lumber, some of which goes to China. China also procures lumber, particularly hardwoods, from Southeast Asia and Russia. High end furniture that requires customization, skilled woodworking, and is bulky also tends to be manufactured closer to the customer in the United States, and custom cabinetry and wood countertops usually require local manufacture. Still, about half of the mass marketed wood furniture (non-upholstered) market is supplied by imports, and U.S. employment in this sector has fallen by almost half over the 2000-2005 period. The shift to foreign manufacturing by wood furniture manufacturers and the focus on retail and distribution is highlighted by the change in the name of the “American Furniture Manufacturers Association” to the “American Home Furnishings Alliance.”11 It should be noted, however, that some furniture manufacturing is returning to or being located in the United States. The Swedish firm Ikea has established a production plant in Virginia, and certain high-end brands either are expanding operations in the United States (such as Stickley12) or are relocating some production back from overseas to North Carolina (such as La-Z-Boy). 13

11

See CRS Report RL34001, U.S. Furniture Manufacturing: Overview and Prospects, by Stephen Cooney.

12 L. & J.G. Stickley, Inc., Our History, accessed January 7, 2009. http://www.stickley.com/OurStickleyStory.cfm?SubPgName=OurHistory&BodyTxt=On.

13 Larry Rohter, “Shipping costs start to crimp globalization," International Herald Tribune, August 2, 2008, Internet version.

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