HIGHLIGHT – Mexico’s meteoric rise as a furniture manufacturing location in recent years is hard to deny. The country’s furniture exports to the United States increased by 61% in 2021 compared to 2020. Many furniture manufacturers have recently moved there, including Legends Furniture, New Classic Home, American Woodcrafters and A-America.
But one of those companies may not be as optimistic as it once was.
“Things are negative, and Mexico in particular is more negative,” said Christian Rohrbach, president of A-America. “Container rates are coming down and that is helping things in Asia. I remain generally optimistic about Mexico, but things are changing. Trucking costs are rising. Diesel prices are on the rise. And this is happening as container rates drop.
The hardwood furniture maker unveiled its first bedroom collections from the region at the Las Vegas market in January.
Rohrbach’s original plan, which was to use Mexico as a more general means of diversification, remains his strategy. And he still sees the value of being there.
“Asia is still our main destination, but we want to have eggs in multiple baskets,” he said. “You never know if a virus or a war will come and destroy part of the supply chain. What will happen with Taiwan? What will happen with China? You never know .”
Deadlines are always an advantage. “Mexico always offers faster turnaround times at 45 days or less,” he said. “Delivery time to Asia is 60-90 days.”
Rohrbach said labor issues have improved, but finding and keeping workers is still not easy. And with only 130 million people in the country, it can never hope to reach Asia’s level of production.
How does he forecast the industry as a whole?
“It’s opaque,” he said. “The midterm elections are approaching. The stevedores’ strike still maintains uncertainty. Geopolitical issues in Asia. But I am cautiously optimistic. I don’t think the housing market is as bad as it was in 2008. There’s a housing shortage in the western United States in particular, and I think that will work in favor of the industry, a once interest rates have stabilized, of course.