Economic figures

Challenging times for the German furniture industry

Corona pandemic, Ukraine war and material shortage: times remain uncertain and challenging for the German furniture industry. In addition, there are a whole series of other challenges, such as the weak consumer climate, the summer season with heat and a general desire to travel, inflation and rising energy prices. Jan Kurth, Managing Director of the German Furniture Industry Associations (VDM/VHK), reported last week on the current economic situation in the furniture industry.

Aug 29 2022

Turnover increased by 13.4 percent in the first half of 2022

According to the report, German furniture manufacturers were able to increase their turnover in the first half of 2022 by 13.4 percent to around 9.5 billion euros. The change in turnover primarily reflects the increased cost of materials. The growth in volume was significantly lower than the growth in turnover. Meanwhile, June showed a weakened dynamic with a 4.3 per cent increase in turnover.

In the first half of 2022, domestic sales developed positively with a plus of 13.8 percent against the background of good demand in winter and in view of the high order backlogs at the end of 2021. Foreign sales in the German furniture industry also increased in the first half of 2022 with plus 12.6 percent, although growth was somewhat lower than in Germany.

While foreign sales were still developing significantly more dynamically than domestic sales until the end of February, the trend reversed again since March in view of the negative effects of the war in Ukraine and the sharp rise in transport and logistics costs. When assessing the current results, reference must also be made to the previous year's figures - the sales of German furniture manufacturers increased by a total of 4.1 percent in the first half of 2021.

At that time, domestic sales rose by 1.1 percent and foreign sales by 10.7 percent. The current sales of German furniture manufacturers are significantly above the level of 2019, both domestically and abroad, and thus above the comparative values before the Corona crisis.

Turnover development of the individual segments

With regard to the development of turnover in the first half of 2022, there are considerable differences between the individual segments of the German furniture industry. According to official statistics, the kitchen furniture industry recorded a strong increase in turnover of 12.4 percent to around 3.2 billion euros, once again proving to be an important growth driver for the industry. The highest increase in turnover was registered by the manufacturers of upholstered furniture, whose sales increased by 19.1 percent to 577 million euros from January to June 2022.

The development of sales in the largest segment of the furniture industry - other furniture (including living room, dining room and bedroom furniture) as well as furniture parts - was also more positive than the industry average with a plus of 17.1 percent to 3.3 billion euros. In contrast, the smallest segment of the industry - the mattress industry - reported a slight decline in turnover of 7.1 per cent to 336 million euros.

Varying development of export markets

A look at the individual export markets reveals the following picture: In most European countries, sales increased significantly against the background of overcoming the negative economic effects of the Corona crisis and the removal of travel restrictions. Particularly pleasing and not necessarily to be expected is the increase in exports to the United Kingdom with a strong plus of 17 per cent.

France still occupies first place in the ranking of the most important export markets with a slight minus of 2.8 per cent, followed by Switzerland with plus 3 per cent, Austria with minus 3.4 per cent and the Netherlands with plus 11.6 per cent. Significant growth was also recorded in other important European export markets such as Italy, Spain, Poland, the Czech Republic and Norway.

欧洲以外的出口市场开发了differently so far this year. From the industry's point of view, it was particularly positive that the USA, after overcoming the consequences of the Corona crisis, once again took on the role of international economic driver in the furniture sector - German furniture exports across the Atlantic climbed by a proud 25.8 percent from January to June 2022 compared to the previous year.

Although China will remain the second most important non-European export market for German furniture in 2022, German furniture exports to the Middle Kingdom fell by 10.4 percent in the first half of the year. The reason for this was not least the Chinese government's strict zero-covid strategy, which negatively affects economic growth and results in considerable travel restrictions.

Since the end of February, the Russian war of aggression against Ukraine has led many German furniture manufacturers to completely or partially suspend their business activities in Russia. As a result, German furniture exports to Russia have slumped by 29 percent so far this year.

In contrast, Saudi Arabia developed extremely positively (+18.7 per cent) against the background of the political and economic opening of the country, even though exports to the country were still at a relatively low level.

Furniture imports with strong growth

德国家具进口强劲增长了13.5cent to 5.8 billion euros in the first half of 2022. However, the dynamics in the individual countries were very uneven: with an increase of 24.1 percent to just under 1.9 billion euros, imports from China rose at an above-average rate. However, the growth in import value was mainly due to the significant increase in the price of furniture from Chinese production - the import volume fell by 8.6 percent in the same period.

In terms of import value, China continues to expand its position as the most important country of origin for furniture, ahead of Poland (+10.6 per cent). Poland's share of total imports fell to 26.2 percent. Imports from Italy, in third place, fell slightly by 0.5 percent. Imports from Vietnam (+31.9 per cent), Turkey (+80.4 per cent) and Lithuania (+19.2 per cent) increased significantly, while imports from Ukraine (-18.8 per cent) and Belarus (-25.2 per cent) declined, mainly due to the ongoing war.

Forecast 2022: turnover increase of six to eight per cent

Despite the current challenges, such as the increase in material costs and the ability of upstream suppliers to deliver, the association is confident that the topics of home and furnishing will remain in the consumer's focus. One's own home remains a safe place of retreat in uncertain times and after the hot holiday summer comes the renewed retreat into one's own four walls with autumn.

Against this backdrop, Kurth expects a slight decline in volume development for the German furniture industry in 2022 as a whole and an increase in turnover of six to eight percent due to price effects. In February - even before the outbreak of the Ukraine war - the industry had predicted a sales increase of around ten percent.

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