ISPA ups 2011 Bedding Growth Forecast to 7.5%

The mattress industry will see strong growth in the dollar value of bedding shipments this year while unit growth will be more modest. Bedding business next year won't be quite as robust.
     That's the latest mattress forecast from the International Sleep Products Assn., which issues bedding forecasts twice each year, in the spring and fall. The forecasts are prepared by ISPA's Forecast Panel, which includes leading mattress producers and component suppliers.
     The new forecast envisions the dollar value of bedding shipments rising by a healthy 7.5% this year, with units increasing by 4%. ISPA had earlier forecast a 5.7% dollar gain and a 3.5% unit gain for 2011.
     Next year, ISPA forecasts that bedding dollars will increase by 6%, with units increasing by 3.5%.
     If those forecasts materialize, the bedding comeback, which took hold in 2010, will extend to a three-year run.
     The industry wrapped up 2010 on a solid note, with the dollar value of bedding shipments jumping by 4.1% and bedding units rising 6.2%.
     ISPA's Forecast Panel begins its work by looking at economic models prepared by the University of Michigan. The panel members then factor in their own assessments of mattress conditions and sales outlooks. The panel believes that the growth trends established last year will continue, and that dollars and units will post "healthy increases for the balance of 2011 and 2012."
     The industry's average unit price for mattresses decreased 1.9% in 2010, but the panel is forecasting an AUP increase of 3.4% this year and 2.4% next year.
     Even with the unit and dollar gains forecasted through 2012, the industry has a way to go to regain lost ground, according to ISPA.
     "Notably, 2010 marked the end of three consecutive annual declines in unit shipments," ISPA said. "Moderate unit expansion is expected over the forecast horizon. The 2012 value of mattress shipments will be only slightly below the 2006 levels, but the units shipped in 2012 will remain below 1999 levels."
     ISPA believes the housing recovery will remain slow over the forecast horizon, as foreclosures and declining home prices remain an issue. "The housing market, however, has recovered from the lowest of lows, and 30-year conventional mortgage rates, which have a major influence on homes sales, are expected to remain low," ISPA said.
     In his "Another Perspective" column that is distributed along with the ISPA forecast, forecast panel member Jerry Epperson said he believes the 4% unit increase forecast for this year is "conservative," and added: "The 7.5% gain in dollars is more a reflection of mix changes than price increases, although price increases are evident especially in petroleum- related costs."
      Epperson also said that "it appears housing finally hit bottom in February. The dramatic decline in home prices is finally bringing buyers back into the market."