Declining EU wooden furniture imports during 2013.
By ITTO Japan.
EU wooden furniture market. Total supply of wooden furniture into the EU27 market is estimated to have been euro 50.4 billion in 2012, down 2% from euro 51.5 billion in 2011 EU27 production decreased 4% from euro 46.45 billion to euro 45.22 billion. Imports increased 3% from 5.07 billion to 5.27 billion. In 2012, imports accounted for 11.6% of all furniture supply to the EU, up from 10.9% the previous year, but below 12.5% recorded in 2010. Overall consumption is estimated to have fallen 4% in 2012 from euro 43.35 billion to euro41.75 billion (Chart 3). The Eurostat furniture production index suggests that the downward trend in EU production has continued into 2013. However, the rate of decline has slowed due to stabilisation in German and French production, a strong rebound in Polish production and signs of improvement in the UK. Production has continued to slide in Italy and Spain this year.
Uncertainty surrounding Italian furniture production
Eurostat report that the value of wooden furniture production in Italy during 2012 increased 16% from euro11.6 billion to euro 13.4 billion. This is almost certainly a statistical error. It would imply that production last year returned to levels similar to those prior to the financial crises in 2008. However this trend is contradicted by a wide range of other economic data and anecdotal reports which indicate that the sector is more likely to have contracted in 2012. Timber traders report low and declining consumption of hardwood in the Italian furniture sector last year. Eurostat‟s own index of production volume records a continuing decline in 2012. The Milan-based furniture industry research organisation, records a 10% decline in total Italian furniture production last year. The FII Ltd analysis aligns with the estimates and assumes that Italian wooden furniture production fell 9% from euro11.57 billion to euro10.50 billion last year. Italian manufacturers recorded a 2% increase in export market sales during 2012, from euro4.75 billion to euro4.84 billion. However, weakness in the Italian domestic furniture market led to a sharp 14% decline in imports from euro825 million to euro713 million. Overall wooden furniture consumption in Italy is estimated to have fallen 17% from euro7.65 billion to euro6.37 billion during 2012. In contrast to Italy, the German wooden furniture market remained quite stable during 2012. German wooden furniture production is estimated to have increased by 1% from euro10.53 billion in 2011 to euro10.65 billion in 2012, mainly due to a 3% increase in domestic market consumption from euro10.35 billion to euro10.66 billion in 2012.
If these estimates are accurate, it means that Germany may have overtaken Italy as the largest European wooden furniture manufacturing country during 2012. Between 2011 and 2012, German wooden furniture exports decreased 2% from euro4.22 billion to euro4.14 billion, while imports increased 3% from euro3.98 billion to euro4.10 billion.
Euro value of UK furniture consumption up 6% in 2012
In terms of euro value, UK consumption of wooden furniture recorded a 6% increase from euro6.52 billion in 2011 to euro6.88 billion in 2012. UK production is estimated to have increased 2% from euro4.31 billion to euro4.40 billion, boosted both by the rising value of domestic consumption and export sales. UK furniture exports are mainly targeted at the US and Irish markets, both of which are showing slow signs of recovery. UK exports of wooden furniture increased 5% from euro343 million in 2011 to euro359 million in 2012.
The value of UK wooden furniture imports is estimated to have increased 11% from euro2.55 billion to euro2.84 billion between 2011 and 2012. These positive numbers for the euro value of consumption and production in the UK need to be considered in the light of the GBP being on average 10% stronger against
the euro in 2012 compared to 2011. The UK government‟s own Index of Production for UK furniture, which is measured in GBP and fed into the data that leads to the official GDP figures, suggested poor performance in 2012 over 2011 with a fall of over 10%. The French wooden furniture sector suffered a 4% decline last year from euro3.35 billion to euro3.21 billion. French products came under increasing competitive pressure both at home and in export markets. Exports of wooden furniture from France decreased 4% from euro782 million to euro749 million while imports into the country increased 2% from euro3.0 billion to euro3.1 billion.
Catastrophic collapse of Spanish furniture sector continues
The catastrophic collapse of Spain‟s wooden furniture sector continued during 2012. Production fell a further 16% from euro2.60 billion to only euro2.17 billion. Concerted efforts to boost overseas sales led to a 4% increase in exports from euro606 million in 2011 to euro633 million in 2012. However this could not offset a 21% decrease in Spanish wooden furniture consumption from euro2.72 billion in 2011 to euro2.15 billion in 2012. Spain‟s imports of wooden furniture declined 16% from euro727 million in 2011 to euro612 million. Meanwhile Poland, a country which has seen significant inward investment in furniture production capacity in recent years, recorded a 2% decrease in production value from euro3.92 billion in 2011 to euro3.85 billion. This was mainly due to weakening consumption in the domestic market as exports remained stable at $3.38 billion.
Europe‟s smaller wooden furniture producing countries do well in 2012
Some positive trends were recorded by several of Europe‟s smaller wooden furniture manufacturing countries during 2012. Particularly notable is Portugal where wooden furniture production increased 48% from euro 557 million in 2011 to euro 825 million in 2012. Portuguese wooden furniture exports increased 13% from euro432 million to euro487 million during the same period. A few Eastern European countries also increased wooden furniture exports last year, including Lithuania (+23% to euro 808 million), Czech Republic (+11% to euro310 million), Slovakia (+3% to euro417 million), and Romania (+4% to euro762 million). In most of these countries imports are declining at the same time as exports are rising, indicating their growing importance in the supply of wooden furniture both inside and outside the region.
Declining EU wooden furniture imports during 2013
Imports of wooden furniture into the EU from outside the region increased 3% from euro 5.07 billion in 2011 to euro5.27 billion last year. However, the rising trend in imports in 2012 has reversed in 2013 (Chart 5).
In the first 6 months of 2013, EU27 wooden furniture imports were down from all the main external suppliers including China (-11% at euro1224 million), Vietnam (- 4% at euro297 million), Indonesia (-19% at euro154 million) and Malaysia (-27% at euro91 million). Imports of wooden furniture from outside the EU have declined into all the largest European markets this year including the UK (-7% to euro767 million), Germany (-8% to euro465 million), France (-19% to euro346 million), Netherlands (-16% to euro177 million), Belgium (-12% to euro118 million) and Italy (-14% to euro99 million) (Chart 6).
It is tempting to attribute some of the decline in EU imports of wooden furniture during 2013 to the implementation of the EU Timber Regulation (EUTR) in March 2013.
The complexity of supply chains and difficulty of providing clear evidence of legal wood harvesting required by EUTR might lead to discrimination against imported wooden furniture products.
However the evidence of the trade data suggests that, so far, other commercial factors have probably been more important. The recent downturn is apparent in imports of all furniture products, not just those regulated under EUTR. Chart 8 indicates there has been a significant decline this year in EU imports of wooden seats – which are not EUTR regulated – as well as in products such as dining/living room furniture and bedroom furniture which are EUTRregulated. The downturn is also apparent in furniture manufactured in materials other than wood. Charts 9 and 10 show the recent trend in monthly import value of all furniture into
the EU by material type. Chart 9 shows how wooden furniture imports have been lower in the first 6 months of this year compared to the first 6 months of both previous years. Chart 10 shows how the share of wood in all furniture imports has not changed significantly over the last 2 years. During this period, imports of metal furniture have declined as much as wooden furniture. Rather than EUTR, the main driver of the decline in EU furniture imports during 2013 may be a slight improvement in the competitiveness of domestic production as labour and other costs have been rising in China. Chart 10 also highlights the strong seasonal fluctuation in import share between wood and metal furniture types. This is due to larger volumes of wooden interior furniture being imported in the autumn months in the build-up to Christmas and the January sales.
Larger volumes of metal garden furniture are imported in the spring months in preparation for the summer season. This chart suggests that the real impact of EUTR will only become apparent when full data on wooden furniture imports in autumn 2013 becomes available. For more information:
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