CSIL world furniture outlook workshop

by Alessandra Tracogna

On Thursday, April 17 2008, during the Milan Furniture Fairs I SALONI, CSIL organised the 8th edition of the "World Furniture Outlook Workshop", a seminar on international furniture markets in which a distinguished group of sector operators discussed the present situation and the future prospects of the furniture industry. This year the seminar gathered over 80 participants from 20 countries.
The meeting was chaired by Ugo Finzi, Senior Advisor at CSIL, who also presented some data on the outlook for 2009.

Alessandra Tracogna, Director Country Analysis and Forecasts, CSIL , opened the workshop presenting the main results of CSIL "World Furniture Outlook" report, a research issued twice a year based on the processing of data from national and international sources that cover the 60 most important countries in the world, which are relevant as furniture manufacturers, traders and consumers.
An important aspect discussed during the seminar was the industrial relocation process, that is one of the most important structural changes involving not only the furniture industry but the manufacturing industry as a whole.
The second most important structural phenomenon discussed was the increase in the degree of openness of furniture markets. "This is the reason why, when looking at these figures, it becomes evident that speaking of a Global Furniture Market is becoming more and more appropriate" Alessandra Tracogna said.

The core of the meeting was when speakers from individual countries summarised the performance of the furniture sector in their respective countries, outlining a profile of each single market in an international framework where competition plays an increasingly important role.

Following speakers took part in the workshop:

Reet Truuts

Martti Lindman

Jan Kurth

Giovanni Belgiojoso

Jacopo Brunati

Chiara Stella Pugliese

Carlo Fiorio

Jason Ting

Maurizio Stecco

Andrew Ng

Roberto Zoppi

Gönül Çınar

Adam Mason

George Goroyias

What emerged for the European area is the increasing inflows of furniture from emerging economies. This is forcing countries to focus on policies promoting national furniture manufacturing and trade strategies aiming to create an efficient retailing system.

Martti Lindman, from the University of Vaasa, Finland, stressed the importance of a national policy promoting investment in design and quality focussing on customer value creation in order to face low cost import competition.

Jan Kurth, from the German Furniture Association, showed updated statistics on the furniture sectors which highlighted a positive performance of Germany on the foreign markets and a less favourable situation on the domestic market, which will probably close the year 2008 with a 0-1% growth.

The situation in the United Kingdom was illustrated by Adam Mason, from the British Furniture Association, who gave a similar picture, proposing an export strategy (in contrast with the inward looking tradition of the country) in order to enable the domestic manufacturers to better face the slowdown on the domestic market, already saturated by imports.

Also Giovanni Belgiojoso, from CSIL, when giving the picture for Italy, talked about the increasing share of furniture imports on the domestic market in a country, that used to be fully satisfied by the domestic production.

Reet Truuts, from Entreprise Estonia, illustrated the situation of Estonian furniture exports (traditionally the engine of the sector growth), which also thanks to the FDI inflows, registered growth in year 2007 particularly in the wooden furniture and seats segments.
Among the most promising European countries, Russia and Turkey, were also represented.

Maurizio Stecco, from the Italian Russian Chamber of Commerce, gave its point of view on the emerging Russian market and the importance of knowing it in depth, considering Russian tastes and the different potential consumers as well as implementing a retailing strategy in order to reach the urban growing middle class.

Gönül Çınar, from the Association of Turkish Furniture Manufacturers, gave impressive figures concerning furniture exports and imports from and into this country, which is becoming one of the most interesting production bases in Europe.

On the other side, among the South east Asian emerging economies Jason Ting, representing the Malaysian Furniture Promotion Council, gave its point of view on the main challenges the country has to face, namely the US crisis and the fierce competition on costs from China and Vietnam. Despite this scenario, anyway, the forecasts for Malaysian furniture exports in 2010 are extremely positive.

The situation seems also positive for Singapore, according to Andrew Ng, representing the Singapore Furniture Industries Council. The country remains an important investor in all the South East Asian area with the aim of establishing Singapore as a Premier Furniture Hub providing total solutions to the global market.

Roberto Zoppi, from the Italian Chamber of Commerce for South East Asia, completed the picture providing a snapshot on Vietnam and Thailand, who are also increasingly contributing (particularly Vietnam) to the success of this area of the world, thanks to low labour costs and raw material abundance.

Two other important contributors to the analysis came from George Goroyias, from Pöyry Forest Industry Consulting, who emphasized that the 2008/2009 will have a negative effect on demand and prices in Europe and proposed a strategy based on value chain collaboration activities, through integration and clustering, and Jacopo Brunati, from the Italian Woodworking Machinery Manufacturers Association, provided the outlook for the woodworking machinery sector, who seems to give positive signals in terms of future growth.

Chiara Stella Pugliese, CSIL General Manager, briefly illustrated CSIL research and consulting activities in the furniture, lighting and household appliances sectors and Carlo Fiorio, CSIL consultant, presented CSIL econometric model for the World Furniture Consumption Forecasts.

Ugo Finzi closed the seminar with some advance indications about the global forecast for 2009 being prepared by CSIL. The "bad news" - he remarked - is the slowdown in growth of US furniture imports due to decreases in real estate prices and the subprime mortgage crisis, while the "good news" is that the global world outlook for furniture in 2009 remains favourable because of strong demand in Asia, Eastern Europe (including Russia) and South America.

The next session of the World Furniture Outlook Workshop is scheduled for April 2009.

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