In a recent report showing the economic conditions in the Belgian furniture industry in 2023 and First Half of 2024, results showed a turnover decline due to reduced competitiveness and weak demand.
In the first half of 2024 turnover was €1,023.1 million, -7.8% compared to the first half of 2023 (Real decline in volume: -7.1%). Investments were -15.8% in the first half of 2024 (€41.6 million). Exports were at +0.4% compared to the same period in 2023. Germany displaced the Netherlands from second place in sales markets, with a significant increase of 46.4%. France remains the largest sales market.
Imports were at +1.1% compared to the same period in 2023.
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In 2023, turnover in the furniture industry declined by 7% in value, following a stabilisation (-0.4%) in 2022, reaching €2.1 billion. The production volume dropped by 10.9%, while sales prices increased by 3.9%. The rise in sales prices in 2023 resulted from the partial pass-through of higher raw material, energy, and labour costs.
Kitchen furniture was the only product group to maintain turnover in 2023 (+0.8% in value), driven by an 8.6% increase in sales prices, despite a 7.8% decline in production volume. All other product groups in the furniture industry experienced a decline in both turnover and production volume.
Household furniture saw a decrease of 5.5% in value and 11.0% in volume.
Office and shop furniture experienced a sharp drop of 14.6% in value and 15.8% in volume.
Mattresses and bed bases also declined significantly, with an 11.7% reduction in value and 13.8% in volume.
Due to weak construction activity, demand remained low, and export markets experienced a similar situation. During the first half of 2024, turnover continued to decline by 7.8% in value and 7.1% in volume. The turnover of all product groups fell in both value and volume.
Export and import of furniture declined in 2023, with a stabilisation of exports in the first half of 2024.
Belgian furniture exports (including transit trade) fell by 10.8% in 2023. 88.9% of furniture exports are directed to the EU market, where deliveries decreased by 11.6%. Sales to France, the main export market with a 32.4% share, and the Netherlands, the second-largest export market with a 24.4% share, dropped significantly by 23.7% and 11.1%, respectively. However, in the German market, Belgium's third-largest customer with a 19% share, deliveries increased by 14.9%.
The United Kingdom lost its position as the largest non-EU export market (2.5% share) to the United States (2.9% share) following a 13% rise in exports to the U.S., while exports to the UK fell by 10.6%.
In the first half of 2024, furniture exports remained stable (+0.4%). However, deliveries to the European market declined by 1.9%, with exports to France down by 13.0% and to the Netherlands by 11.5%. Germany, with an increase in exports of 46.4%, has now become the second-largest export market for Belgian furniture.
Furniture imports in 2023 were 12.7% lower. The decline in imports from China continued (-8.1% in 2022 and -14.9% in 2023). Nevertheless, China remains the most important and dominant supplier of furniture to the Belgian market, with a share of 26.4%. Furniture imports from the Netherlands (15.9% share) and Germany (12.7% share) also decreased by 4.1% and 10.2%, respectively. Poland, the fourth-largest supplier with a 9.2% share, kept its deliveries steady (-0.7%).
In the first half of 2024, furniture imports increased by 1.1%. The downward trend in Chinese imports came to an end, with furniture imports from China rising by 16.2% in the first half of 2024 compared to the same period in 2023.
Declining investments
The production capacity utilisation rate fell to an average of 73.5% in 2023, the lowest level in 10 years (82.3% in 2022). In the first half of 2024, the utilisation rate was 70.6%, compared to 74.2% in the first half of 2023. Investments increased by 8% in 2023 compared to 2022, marking the third consecutive year of growth. However, in the first half of 2024, investments dropped by 15.8% compared to the same period in 2023.
Conclusion
The Belgian furniture industry has faced a challenging period due to weak demand, high production costs, and declining investments. The decline in turnover, weak construction activity, and low consumer confidence have contributed to the negative performance. However, export opportunities remain for the Belgian furniture industry, especially in Germany and the U.S., despite weaker competitiveness. The outlook for the second half of 2024 suggests at best a stabilisation at low levels.
More information:
Fedustria
www.fedustria.be