After the consumption boom during the epidemic, the “golden age” of the US mattress industry seems to be passing. Although inventory is still to be digested, inflation problems, the decline in employment rate and other factors are still affecting the market, however, for the mattress industry, 2023 is about to usher in a new inflection point.
As an important raw material for making mattresses, the supply of TDI (Toluene Diisocyanate) has also attracted people’s attention in this market fluctuation. TDI is a major component of polyurethane foam, which is widely used in mattress manufacturing, providing superior comfort and support. However, due to price fluctuations of its raw materials benzene and xylene and limited production capacity, the supply of TDI is also facing certain pressure. On the other hand, the demand in the downstream market has also continued to decline. The main sources of financial pressure faced by American consumers are inflation, economic recession, high housing prices and high interest rates. Combined with the above factors, the demand in the mattress market has been relatively sluggish.
Figure 1: Price trend of mainstream US TDI contracts from 2022 to 2023
Source: Tiantian Chemical Network
According to the latest forecast of the ISPA International Sleep Products Association (International Sleep Products Assn), due to economic uncertainty, it is expected that mattress shipments will fall in volume and price in 2023, and then in 2024 year is expected to improve. ISPA predicts that the total shipments of the mattress industry in 2023 will fall by 6% year-on-year to approximately 40.6 million units, and the total value of shipments will decline by 3% to US$10.248 billion. This means that both mattress manufacturers and suppliers will face greater market pressure and need to find innovative solutions to maintain business stability.
However, the outlook to 2024 offers a glimmer of hope. With mortgage rates expected to slow and the real estate sector recovering, the mattress industry is also expected to benefit. ISPA predicts that total mattress shipments in 2024 will increase by 3% compared to 2023, reaching US$41.8 million, and the total value of shipments will increase by 5%, reaching US$10.76 billion. This indicates that the mattress industry may gradually get out of the trough and usher in a new round of growth cycle.
Echoing ISPA’s forecast, Mann, Jerry Epperson, industry analyst at Armistead & Epperson, is also optimistic about the future of the mattress industry. He gave three reasons: first, the Fed is close to the last 0.25% increase, which will help stabilize the economic situation; second, inflation has slowed, which will ease market uncertainty; third , The sales of old and new homes have achieved positive results in the past few months, which will boost the demand in the mattress market. According to data provided by the NAHB Association, the U.S. homebuilder confidence index rose to a 13-month high in July. In the case of tight housing supply, buyers continued to choose new homes. Demand will inevitably rise accordingly.
Figure 2: 2022-2023 US Homebuilder Confidence Index
Source: NAHB
Despite the challenges, the mattress industry holds great potential. As people pay more attention to health and sleep quality, the function and comfort of mattresses will become an important consideration for consumers. Therefore, mattress manufacturers not only need to pay attention to changes in the supply chain and economic environment, but also continue to innovate products and technologies to meet changing market demands.
In general, the US mattress industry may be experiencing a period of trough, but the future prospects are still worth looking forward to. Through the optimized utilization of TDI and other raw materials and the application of environmental protection technologies, as well as accurate insight into market demand, mattress manufacturers will have the opportunity to create new development opportunities and meet the challenges and changes of the industry.
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