The furniture sector as a whole is a one of the most basic industry, if the industrialised countries are considered. The furniture sector generally represents between 2 to 4% of the total production value of the manufacturing industries. The global furniture industry has shown a growth rate of 8% in 2005.The industry was valued at around US$76 billion from US$70 billion in the year 2004. As far as gaining the top spot as the world's largest furniture exporting country, China is giving a run for its money to Italy. In 2004 Italy was able to narrowly beat China. Italy's exports were US$10.5 billion compared to China's US$10.3 billion. Others that made it to the list as top five furniture exporting countries were Germany, Poland and Canada. While the top five importing nations of 2004 were the US, Germany, UK, France and Japan the solitary Asian nation.

In European Union countries furniture sector accounts for approximately around 2% of the Gross domestic product and nearly 2.2% of the total engagement in workforce. In 2004, the top European union -25 furniture manufacturers were able to produce Euro 95.5 billion worth of furniture. It was an increase of 1.1% compared with that in 2003. This was around 43.1% of the global production. The following graph highlights the global furniture production in the year 2004.

(Courtesy UEA 2005)
As is clearly seen the North American Free trade association zone comprising the USA, Canada and Mexico accounted for about25.8% of the global production or 57.1 billion Euros. The Asian zone's production was around 51.5 billion Euros. Interestingly it was a +7% as compared to 2003. Asia also emerged as the fastest growing furniture producing area. Major producers being China with 19.4 billion Euros up 12% from previous year and Japan with 16.2 billion Euros. While in the South American countries production exceeded 5 billion Euros. Brazil alone accounted for two thirds of the production.

One of the fact that is emerging is that the manufacturing hub of furniture is quietly shifting to Asia particularly to China. This change of world furniture manufacture to Asia and China first started in the 1980s and the nineties of the last century. In the year 2004, the total output of China's furniture was roughly valued at about US$33.7 billion with exports touching US$10.353 billion, that is nearly 31% of the total output. From 1994 to 2001 the Chinese furniture industry has been able to increase exports by a phenomenal 335 %.

It is beyond doubt that China has emerged as the largest exporter of furnitures to U.S.A market. In 2001 the figure of total export was $2.8 billion. The exports to US has shown an annual growth rate of more than 35 percent.

Let us look at the Global trade in the furniture sector. For the year 2004, the global furniture trade stood at 69.7 billion Euros. The European Union furniture manufacturers were able to export 34.9 billion Euros of furniture. It was around 52.1% of the world total. The Asian countries are now the second largest furniture exporting region, with China taking the lead for the number one spot. The countries of the NAFTA zone became the largest furniture importing zone. Their total imports were 22.3 billion Euros with USA's share valued at 18.1 billion Euros. The figures are shown below for the global furniture trade.

Key driving forces in the demand for Furniture:
The following factors guide the demand for furniture:-

• Elasticity interms of the disposable income of the householdGenerally the estimated elasticity changes from country to country. But the average elasticity has been found to be 1.5 that effectively means, if the income increases by 1, the demand for furniture is going to rise by 1.5 and vice versa.
  
  

• Economic scenario - This translates into consumers' confidence in the economy of the nation, growth of the Gross National product, the purchasing power and also factors like level of unemployment.
  
  
• Infrastructural considerations - Like level of investments in housing etc.
  
  
• The evolution of the borrowing terms - If the interest rate is hiked the consequences are higher costs for borrowing for purchasing furniture and housing, and vice versa if the interest rate falls
  
  
• Demographic variables - Such as the evolution of marriages, household formations, births taking place and the composition of age class.
  
  
• Distribution of wealth - It is quite evident that demand for furniture would be s higher in countries where wealth is more evenly distributed than in countries where wealth has a tendency to be concentrated.