Furniture Industry Sees an Opportunity Despite Financial Crisis
[2009-01-19]
Despite the financial crisis and its current effects on the economy, the German furniture industry sees an opportunity to increase the status of homes and furnishings in these difficult times. Whenever people feel extremely insecure, their own home and the sense of security and safety connected with their own four walls assume a higher status. Only the furniture industry can satisfy this feeling now, and thereby bring furniture higher up the ranking list of personal desires. In addition, furniture as a valuable and life-long consumer item represents a long-lasting and reliable investment.
The figures and statistics seen since the summer provide evidence that this hope is not entirely without foundation. In the otherwise extremely different 3rd quarter of the year, in which almost no other industry branch escaped unscathed, growth of 1.5 percent was realised.
In total, German furniture producers with 50 employees or more sold furniture to a total value of 11.8 billion euros from January to September 2008, and thus 3.4 percent more than in the same period last year. Due to the negative economic environment, this growth rate will, it is true, decrease by the end of the year, but nevertheless we expect growth of between 2 and 2.5 percent for the year 2008.
Domestic business remained stable with a nominal increase of 0.5 percent (6.0 billion euros) - similar to that in previous years. This shows that the furniture industry did not profit sufficiently from the economic upturn of the last few years, but is now less heavily affected by the downturn too.
We are seeing a gradual slowdown in exports, though these remain at a high level. From January to September 2008, exports climbed by 7.2 percent to a value of 5.8 billion euros.
For years, the Netherlands has topped the list of the most important export markets, but in the course of the year 2008 it was pushed down to second place by France. Austria, Switzerland and Great Britain follow on from the two frontrunners. High growth rates are currently being realised in Eastern Europe and the Middle East. Furniture with a total value of almost 900 million euros was exported to Eastern Europe in the first three quarters of 2008, which corresponds to an increase of 14.5 percent against the same period last year. In the same period, exports to the Middle East increased by 62.5 percent to over 100 million euros. However, export levels to North America are currently decreasing.
Free-standing cabinets (living room, dining room and bedroom furniture) made in Germany are currently in particular demand with a share of 40 percent of all German exports. These are followed by chairs with a share of 31 percent, kitchen furniture with a share of 18 percent and office furniture with a share of 8 percent.
Within Germany, the segments developed as follows in the first nine months of this year: As the largest branch, living room, dining room and bedroom furniture saw turnover of 4.6 billion euros, which means an increase of 4.2 percent compared to last year. A total of 1.7 billion euros' worth of upholstered furniture was sold, thus corresponding to a drop of 7.6 percent. Turnover for the kitchen furniture industry amounted to 3 billion euros (up 5.7 percent), and for office furniture to 1.1 billion euros (up 17.9).
According to official statistics, there are currently 500 furniture companies with more than 50 employees in Germany. When converted to the old statistical basis of 20 employees or more, this means that there are around 1,060 companies producing furniture, which is exactly the same as last year. The number of people employed fell slightly in the first nine months by 0.3 percent to 82,821. According to the old method of calculation, the number of employees thus fell by around 104,000.
Overall, the situation in the domestic furniture industry is currently satisfactory compared to that in many other industries. The furniture industry even has the chance to emerge from the crisis as one of the winners. However, particular efforts are required for this in the marketing of products. Desires are created within the industry, and emphasis must be placed on the value of furniture rather than on price, on quality rather than on mass-produced goods, and on design rather than arbitrariness.
The figures and statistics seen since the summer provide evidence that this hope is not entirely without foundation. In the otherwise extremely different 3rd quarter of the year, in which almost no other industry branch escaped unscathed, growth of 1.5 percent was realised.
In total, German furniture producers with 50 employees or more sold furniture to a total value of 11.8 billion euros from January to September 2008, and thus 3.4 percent more than in the same period last year. Due to the negative economic environment, this growth rate will, it is true, decrease by the end of the year, but nevertheless we expect growth of between 2 and 2.5 percent for the year 2008.
Domestic business remained stable with a nominal increase of 0.5 percent (6.0 billion euros) - similar to that in previous years. This shows that the furniture industry did not profit sufficiently from the economic upturn of the last few years, but is now less heavily affected by the downturn too.
We are seeing a gradual slowdown in exports, though these remain at a high level. From January to September 2008, exports climbed by 7.2 percent to a value of 5.8 billion euros.
For years, the Netherlands has topped the list of the most important export markets, but in the course of the year 2008 it was pushed down to second place by France. Austria, Switzerland and Great Britain follow on from the two frontrunners. High growth rates are currently being realised in Eastern Europe and the Middle East. Furniture with a total value of almost 900 million euros was exported to Eastern Europe in the first three quarters of 2008, which corresponds to an increase of 14.5 percent against the same period last year. In the same period, exports to the Middle East increased by 62.5 percent to over 100 million euros. However, export levels to North America are currently decreasing.
Free-standing cabinets (living room, dining room and bedroom furniture) made in Germany are currently in particular demand with a share of 40 percent of all German exports. These are followed by chairs with a share of 31 percent, kitchen furniture with a share of 18 percent and office furniture with a share of 8 percent.
Within Germany, the segments developed as follows in the first nine months of this year: As the largest branch, living room, dining room and bedroom furniture saw turnover of 4.6 billion euros, which means an increase of 4.2 percent compared to last year. A total of 1.7 billion euros' worth of upholstered furniture was sold, thus corresponding to a drop of 7.6 percent. Turnover for the kitchen furniture industry amounted to 3 billion euros (up 5.7 percent), and for office furniture to 1.1 billion euros (up 17.9).
According to official statistics, there are currently 500 furniture companies with more than 50 employees in Germany. When converted to the old statistical basis of 20 employees or more, this means that there are around 1,060 companies producing furniture, which is exactly the same as last year. The number of people employed fell slightly in the first nine months by 0.3 percent to 82,821. According to the old method of calculation, the number of employees thus fell by around 104,000.
Overall, the situation in the domestic furniture industry is currently satisfactory compared to that in many other industries. The furniture industry even has the chance to emerge from the crisis as one of the winners. However, particular efforts are required for this in the marketing of products. Desires are created within the industry, and emphasis must be placed on the value of furniture rather than on price, on quality rather than on mass-produced goods, and on design rather than arbitrariness.
Source: www.furniturefair-cologne.com
Keywords:Furniture
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