Southeast Asia’s Furniture Is Production Facing A Slowdown

By Michael Hermens, Group Managing Director of APP Timber, a ‘solution provider’ company he founded 23 years ago that specialises in imported certified timber solutions

It seems that the tide has changed, June marked the start of an unusually high number of order cancellations by our Vietnamese customers. Luckily, most orders were prepaid or not yet shipped, but others were not so lucky. one of our Brazilian suppliers informed us that they have many containers of Pine sawn timber either cancelled, on their way to, or stuck at HCMC port. 

Vietnam, next to China, is the largest exporter of low-end to medium-range furniture to the US and Europe. Different than during the two Covid years, these major target markets are facing reduction in end users’ demand for this range. 

Many American and European buyers report full warehouses and showrooms, which can last them well over six months. Consequently, many of these foreign-importing buyers have stopped consignments of current, ready-to-be shipped orders with their Southeast Asian suppliers. 

The general market optimism of the last two years has turned, most probably due to the fast-increasing inflation, which resulted in dramatically reduced furniture purchases.

This situation is more visible in Vietnam and Malaysia since both countries have a high percentage of big factories producing low to medium priced furniture, but less in Indonesia where many factories focus on high-end products. 

And the slowdown seems not to affect other type of production segments like finger-jointed laminated panels, engineered doors, etc. One can conclude that ‘big’ is not always better since these big suppliers are always facing the brunt of any economical downturn, whereas the smaller more customer-specific producers seem to be less affected.

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  • Last modified on Monday, 22 August 2022 05:40
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