Market Updates
Interiors brief: Japan
6 May 2008
Collected data shows that generally annual spending in Japan on "Interior Furnishings" increased year-on-year in 2007, driven by purchases of home electronic equipment such as refrigerators, washing machines and air-conditioners. However purchases of "Floor coverings" (carpets) remained sluggish, seeing a second consecutive year-on-year decline. Expenditure on floorcoverings was particularly weak from November, dragged down (with a lag) by the sudden drop in new housing starts last July when changes to building safety regulations came into effect.
Spending on bedding products continued to decrease in 2007, after similarly falling in 2006. The decline was due mainly to weak demand for Futons (quilts). Blankets and other bedding product purchases recovered strongly for a fall in 2006.
Retail prices of interior textile products have been slow to recover and remain subdued to-date, with carpet prices falling moderately in 2007, and bedding prices also falling, although by a smaller amount. As the economic outlook deteriorated sharply in the latter half of 2007, pessimism has been growing among bedding /interior-textile retailers, who are looking to push their price levels downward again. That is squeezing the profit margin of manufacturers who are already suffering from higher raw material prices and production costs.
January spending continued to be affected by a rising cost of living with consumers remaining reluctant to spend on non-essentials such as interior textile and apparel products.
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© The Woolmark Company 2008
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