Economic ups and downs
BY JULIE A. PALM
Just as it is impacted by broad government regulations, the mattress industry is part of a larger economy, buffeted by its ups and downs. This era began with a nasty recession made all the more painful by the fact that it followed one of the longest economic expansions in U.S. history—an expansion that had helped grow the size of the wholesale U.S. mattress market to more than $2.3 billion in 1990.
According to the National Bureau of Economic Research, a nonprofit research organization that tracks U.S. economic activity, the recession officially started in July 1990 and was over in eight months, but mattress sales had been sluggish prior to and remained slow after the recession was officially over.
“Predictions that an economic recovery was just around the corner proved premature as month after month the recession dragged on,” the editors of BedTimes lamented in the December 1991 issue.
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The industry was eager to feel its own rebound—and got it in 1992. A long period of robust economic growth followed and, by 1999, ISPA statistics showed that the wholesale value of U.S. shipments of mattresses and foundations had topped the $4 billion mark.
Shortly after, the industry faced another recession, this one caused in large part by the collapse of the dot-com bubble and the Sept. 11 attacks on U.S. soil. (See story on this page.) The economic slowdown felt painful at the time, but was relatively shallow and short-lived—especially when compared with what would happen in 2007.
In the fall of that year, a collapsing U.S. housing market created a domino effect, taking down major financial institutions and the stock market along with it. The Great Recession certainly earned its grand moniker—this was no eight-month downturn.
The recession officially ended in June 2009, but the nation’s unemployment rates remained above prerecession levels through 2014. And, although housing prices rebounded in most markets, housing starts remained well below precrash levels, even in 2015.
The mattress industry suffered mightily during the Great Recession.
“The dollar value of mattress and foundation shipments fell 9.1% in 2008, significant not just for the size of the decline but because during the past three decades, the dollar value of shipments has dropped only twice—in 1982 and 2001—and those dips were much smaller,” wrote BedTimes editors in a July 2009 article.
“Since reaching a historical peak of 43.7 million units in 2005, unit shipments have fallen for three years in a row. But the double-digit drop in 2008 was far higher than previous declines. Last year, unit shipments fell 11%.”
Facing sales declines like that, some venerable mattress manufacturers and suppliers, including a few that had weathered the Great Depression 75 years earlier and several recessions since, succumbed to the Great Recession, declaring bankruptcy or shuttering their doors.
By October 2009, both units and wholesale dollar values were showing small gains and, by the end of the era, mattress sales were again on a strong upward trajectory. U.S. mattress producers shipped more than 37 million units in 2014—up 3.9% over 2013 (though still not at prerecession levels), according to ISPA’s annual report released in spring 2015.
Meanwhile, wholesale revenues grew to more than $7.5 billion, a healthy 7.6% gain over 2013 levels and the first time U.S. production broke the $7.5 billion ceiling.
