Building on the modest growth seen in 2011, industry analysts are predicting 3.5 percent growth for residential furnishings for 2012, based in part on slight gains in employment and modestly improved higher home sales, said Andy Counts, CEO of the American Home Furnishings Alliance.

“The biggest challenge facing the industry continues to be the economy,” Counts said. “Although consumer confidence has improved and a double dip recession appears to have been avoided, we are in an election year and that tends to bring many negative factors. On the bright side, 2012 is projected to bring a rebound in housing starts, a decline in foreclosures and attractive mortgage levels. Combined with lower home prices, this creates an excellent opportunity for residential housing turnover. This is an important factor for residential furniture sales.”

Although the demand for sustainable/green certified products has not yet hit the residential furnishings market to the extent of office furniture, Counts said he does foresee this changing over time. “Many companies are positioning themselves for an increased demand in this segment. Those companies are finding that the environmental improvements are also providing cost savings in many areas.”

Also affecting the residential furniture market are regulations including CARB and the boiler MACT. “We are heavily involved with several key issues at both the state and federal level,” Counts said. “In addition to the continuing developments surrounding the use of wood fuel in boilers we will be very active with the EPA as they finalize the formaldehyde regulations. Efforts at EPA may cause California to modify their standard in an effort to stay in front of this issue. The need for a level playing field nationally on this issue will be a primary focus for AHFA in 2012.”