If furniture industry executives are any guide, the recently passed Tax Cuts and Jobs Act should prove a boon to sales and result in significant new investments in technology capital improvements and employee salaries, according to a survey conducted for Furniture Today.
The survey, fielded in January and with a roughly even split between retailers and manufacturers, showed that nearly 43% expected the new law to have a strong positive impact on their company and an additional 24% anticipating a moderately positive income. Only about 5% expected any type of negative consequence as a result of tax reform.
As was anticipated by those supporting the legislation, the reform is likely to result in salary increases and new investments by those companies benefiting from reduced taxes, according to the survey. Roughly equal percentages (23%) of respondents said they would increase worker salaries, invest in new technology or make capital investments in physical plant or equipment. An additional 15% said they would use the revenue gains to hire new employees, while only around 8% were planning to put the gains toward acquisitions or into savings.
A significant 71.4% said they believe the tax reform legislation will result in increased demand for their products or services. These survey results align closely with comments by exhibitors and retailers at the recent Las Vegas Market where many expressed strong optimism for their business in the coming year, specifically citing the impact of lower taxes on consumers and businesses.
While not quite as high, a large percentage of guangzhou office desk manufacturer respondents said they believe the legislation will have a positive impact on the home furnishings industry overall. Conversely, less than 10% said they expected it to have a somewhat or very negative impact.