Wooden Furniture Consumption In Europe Decreased 11%

European furniture consumption and production fell sharply in 2023, according to the International Tropical Timber Organisation's ( ITTO) latest bulletin.

 

ITTO said production and consumption fell by 8 percent and 11 percent respectively in 2023. This follows a decline of 11 percent and 12 percent respectively in 2022.

In 2023, wood furniture production in the EU27+UK was valued at €39.7bn, while consumption was €39.4bn.

ITTO said that these low levels have not been seen 2014, other than in 2020, when the market fell sharply at the height of the COVID pandemic. It cited major alterations in patterns of supply and demand since the Covid-19 pandemic hit in 2020. trade flows, consumer preferences and working conditions, distribution channels, design, and fashion trends. Companies throughout the sector are having to evolve new strategies in response to a transformed world.

Europe’s wood furniture sector has passed through a period characterised by an initial but very short-lived fall in demand in the second quarter of 2020 during the first Covid lockdown, followed by very rapid demand escalation in 2021 with the onset of the home improvement boom. This occurred at a time when material shortages and other logistical challenges greatly reduced availability.

The war in Ukraine and other geopolitical challenges then drove a rapid escalation in energy prices, adding greatly to the existing inflationary pressures. Rising interest rates and declining consumer spending, after demand had been satiated by high spending in the previous two years, then led to a sharp decline in demand starting in the second half of 2022 and continuing throughout 2023.

These trends are all evident in the changing value of production, trade, and consumption of wood furniture in the EU27+UK in recent years.

These figures underline the extent of the downturn in the European economy. In 2023, Europe faced increased uncertainty, sluggish economic performance, and a marked slowdown in the construction industry.

As a result, European consumer demand for furniture was under strain, particularly in the lower and mid-price segments. Demand was hit by the higher cost of living caused by inflation, particularly for energy, and rising interest rates. Renewed interest in other discretionary spending categories, such as travel, added to the challenges in the furniture market last year.

The costs of producing furniture in the EU also continued to rise in 2023. High energy prices, costs of capital and rising labour costs could not be passed onto customers, greatly reducing profitability. Extra-EU export prospects, particularly in the US and China, were also cooling and were not buoyant enough to support EU production. Various bankruptcies, layoffs and downsizing plans were reported in the industry last year. European furniture manufacturers were forced to revise their list prices upwards during the year.

Furniture sector performance has varied widely between European countries in recent times. Eurostat data shows that while overall EU27 furniture production in 2023 was close to the level prevailing in 2015, some countries including Romania, Belgium, Sweden, Germany, Netherlands, Denmark, and France, had fallen well below that level.

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