The Dutch furniture industry is in a challenging transition phase. According to the latest research report by Koninklijke CBM, a trade association for interior design and furniture, the industry was marked by a 7% drop in turnover in 2024, with the higher segment in particular experiencing a contraction of more than 20%. The furniture industry faces considerable challenges: declining consumer spending, rising labour costs and much higher energy costs than in neighbouring countries. The government must improve the manufacturing industry's business climate and competitive position to ensure that there remains a future for the furniture industry in the Netherlands.
The big challenges
The Dutch furniture industry is facing rising labour costs and inflation, which are increasing more sharply than in neighbouring countries. In addition, energy costs in the Netherlands are three to five times higher than in neighbouring countries, which has significantly worsened the competitive position of furniture manufacturers. This puts pressure on margins and makes Dutch furniture products more expensive than those from cheaper production regions, both within and outside Europe. At the same time, consumers continue to postpone purchases, partly due to saturation after the corona pandemic and a stagnating housing market.
Competitive position under pressure
Besides cost increases and reduced demand, the competitive position of Dutch manufacturers is also threatened by the growth of value-for-money brands. These chains are gaining ground due to their affordability and functional designs, which particularly appeal to younger households. In addition, the import of fast-furniture from China is growing, while there is no check whether this furniture meets the high sustainability and circularity requirements our furniture manufacturers have to comply with. All this puts pressure on margins and makes investments to future-proof the furniture industry dry up.
Strategic course changes necessary
To meet these challenges, the industry needs to adapt and innovate. Key strategic priorities are:
- More efficient production processes and cost control through automation, joint sourcing and strategic alliances within the sector.
- Sustainability and circularity, including by developing a quality label such as Made in the Netherlands for sustainability, circularity and sustainable materials.
- Connection to demographic trends by responding to the growth of single-person households and ageing with compact, multifunctional and ergonomic furniture.
- More emphasis on total furnishing and cross-category developments, by extending the range to other living areas such as kitchens and outdoor spaces.
- Targeted product development by introducing affordable premium products to attract younger consumers.
Outlook and market forecast
In the short term, the Dutch furniture market is experiencing slight growth in new construction and household growth, offering opportunities for compact and multifunctional furniture. In the medium term, demographic trends such as ageing and an increase in smaller households are expected to lead to increased demand for ergonomic and luxury compact furniture. In Belgium and Germany, the housing market lags behind, making renovation and refurbishment the main growth opportunities.
Government focus on competitiveness and level playing field
CBM calls on the industry to jointly address challenges and seize opportunities. 'Cooperation and innovation are crucial to strengthen the competitive position of Dutch furniture manufacturers,' said director Kees Hoogendijk. CBM also calls on the government to improve the business climate in the Netherlands and improve the competitive position of furniture manufacturers. A level playing field is needed to ensure the future for the manufacturing industry, and in particular that of the furniture industry in the Netherlands.
More information:
Royal CBM
www.cbm.nl