- Economics and Marketing
During the Salone del Mobile di Milano, the 16th edition of the CSIL World Furniture Outlook Seminar was held, a meeting that saw the participation of over 100 furniture manufacturers, suppliers and operators in the furniture sector interested in learning about and analysing current trends in the sector and above all the future prospects.
The seminar was chaired by Giovanna Castellina, International Marketing Director of CSIL, while Alessandra Tracogna, senior partner of CSIL, illustrated the perspectives and key issues of the sector. The data showed that furniture production is growing globally, with some countries growing faster than others, being more competitive on international markets. According to the figures developed by CSIL, the world furniture production amounted to over $ 400 billion last year, with a 3% increase over the previous year and a cumulative growth of 25% in the last decade (in US dollars) current.
Alessandra Tracogna highlighted how the Asia-Pacific area is distinguished in a global comparison, with more than half of the world production that takes place in that region (China is the lion's share with over 70% of regional production).
However, the speed of growth of Asian production has slowed down recently. The regional context is registering increasing competition within the area and on export markets (Vietnam is growing faster than China) and industry is also facing some common challenges in the production of furniture that affect the competitive advantages of manufacturers.
The furniture industry in the Asia-Pacific area
In his interesting speech, Linda Tu, CNFA's Deputy Secretary General, China National Furniture Association and CAFA's Vice President and General Secretary, Council of Asia Furniture Associations, provided data on the Chinese furniture industry and illustrated the main pillars of the 2025 strategy of Made in China, which aims to build a platform for innovation in production with a focus on topics such as the smart manufacturing and green approach, i.e. simplified production and attention to the environment.
She also reported that the national association is working to strengthen cooperation with partners around the world by promoting a fair system in China, and by carrying out numerous bilateral initiatives abroad. Vietnam is also a very important player in Asia today; according to the data CSIL is in fact the 5th largest exporter of furniture in the world and a growing producer in Asia (the speed of growth of Vietnamese production is higher than the Chinese one). Nguyen Quoc Khan, president of the Vietnamese Handicraft and Wood Industry Association, explained how the furniture industry can count on a positive macro context and a growing flow of foreign direct investments, as well as on some specific advantages of the sector which include the availability of wood and competitive labour.
The furniture sector in the European Union
Europe remains a major player in the furniture sector, being the second largest producer region in the world. According to the CSIL estimates presented at the seminar, the region accounts for about a quarter of the total production of the sector (it was about 40% a decade ago). As illustrated by Roberta Dessì, general secretary of EFIC, the European Confederation of furniture industries, the European furniture sector employs over 1 million people in almost 200,000 companies, mainly SMEs. The furniture market, which has been severely hit by the crisis, is now recovering despite key challenges such as: competition within the area, market fragmentation, import pressure, stable employment, the increase in raw material costs and the protection of innovation. The EFIC identified several priority areas of intervention, including the harmonization process within the EU, the development of environmental and safety regulation, effective copyright protection, access financial framework for innovation and product development and better information for consumers. Alexander Oswald from the National Confederation of the German Wood and Furniture Industry gave an overview of the current situation in Germany. The country is the leading producer and exporter in the European Union, followed by Italy and Poland. Even though companies in the sector have been in difficulty for the last decade, the sector's turnover exceeds the pre-crisis level. The penetration of imports increased, with the trade balance remaining negative. The forecasts indicate an increase in exports above that of production for the internal market.
Poland is also one of the fastest growing furniture manufacturers in Europe. As explained by Patrycja Niemczyk-Favaro’ of the Milan office of the Polish Investment and Trade Agency on behalf of Tomasz Wiktorski of the Polish Development Fund, several indicators have determined the growth of the sector: the creation of new housing and the Consumer confidence has reached record levels on the domestic market while on the other hand unemployment has historically reached the lowest level. Investments in furniture production are increasing and the Polish Furniture Flagship Program aims to support the growth of the sector according to some guidelines: increase the optimization and automation of production, in order to be more competitive, favour consolidation and mergers and acquisitions, thus overcoming the limits of small companies, increasing innovation in design, functionality and materials to create added value.
Mauro Spinelli, senior partner of CSIL, outlined the opportunities deriving from the contract market, highlighting the main market trends. The production of furniture and furnishings for the contract sector in Europe was worth around € 10 billion in 2017, while consumption amounted to around € 7.7 billion according to the latest research developed by CSIL. Hospitality, office, real estate, boating and restaurants were the fastest growing segments that exceeded the European average.
The furniture industry in North America
As for North America, his recent performance is certainly positive; furniture production has indeed increased over the last five years. Local sources seem to be optimistic for the coming years, although some concerns emerge about the negative impact on the US economy of a “possible trade war“.
In conclusion, from the data emerged from the CSIL forecast analysis, the global outlook is positive for the next few years with the furniture market growing at a rate of 3% per annum (in real terms) until 2020. The regions with the greatest growth are 'Asia-Pacific, followed by North America, the Middle East and Africa. If the CSIL scenario is realized, the global furniture trade will grow to reach 150 billion dollars in 2018, with a + 20% increase compared to 2012.