In 2024, the chemical industry in the United States would be confronted with a number of obstacles. These challenges not only put the adaptability of chemical enterprises to the test but also significantly affect downstream industries, particularly the mattress sector, from the macroeconomic environment to specific market changes.
Primarily, the chemical industry is experiencing the effects of high inflation. The production costs of chemical enterprises are substantially increased by the increase in the prices of raw materials and energy. In the interim, the operational risks of these enterprises are further exacerbated by the impact on supply chain stability. This environment indirectly impacts the mattress market by increasing the costs of chemical products, such as polyurethane, that are used in mattress manufacturing. Consequently, the price of mattresses would be higher.
Secondly, the cost pressures on chemical enterprises are also exacerbated by the increasing Consumer Price Index (CPI). The increased costs of raw materials, wages, and rent for chemical enterprises are a direct result of the high CPI growth rate. Ultimately, these cost pressures spread to the mattress market, resulting in a rise in mattress prices and a subsequent impact on consumers' purchase intentions.
The chemical industry is also significantly affected by geopolitical conflicts. Although the United States is not directly involved in the conflicts, the U.S. chemical industry is still impacted by the rising prices of energy and raw materials. It is evident in the supply chain instability as well as the increasing production costs. This instability could result in disruptions in the supply of raw materials, which could impact the production and supply of mattresses in the mattress market.
Furthermore, the rise in U.S. mortgage rates has also affected the mattress market. The rising mortgage rates in 2023 led to higher home-buying costs, pushing monthly payments skyward. This reduced homebuyers’ purchasing willingness and affordability, thereby affecting industries related to real estate, such as construction and furniture. As an important component of furniture, the market demand for mattresses is also indirectly affected. In 2024, as economic growth slows and inflation pressures ease, the Federal Reserve starts signaling interest rate cuts, leading to a decline in mortgage rates. Even though they remain relatively high, there is a more optimistic outlook.
We have also observed significant changes in the mattress market. While traditional spring mattresses still hold the largest market share, composite mattresses are gradually gaining ground. This shift not only reflects consumers’ pursuit of comfort and health in mattresses but also signifies the continuous advancement in mattress manufacturing technology. For the chemical industry, this means the need to continuously develop new chemical products to meet the demand for high-quality materials in the mattress market.
Lastly, it is worth noting that the reduction in the number of foam manufacturers and the industry trend towards vertical integration are also impacting the U.S. mattress market. Over the past few decades, the number of foam manufacturers in the U.S. has been rapidly decreasing, and vertical integration in the industry is evident. This trend has propelled upholstered furniture manufacturers into manufacturing foams on their own, while foam manufacturers are also getting involved in the production of products such as mattresses, pillowcases, and pillows. This change not only improves the efficiency and quality of mattress manufacturing but also provides new development opportunities for the chemical industry.
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