CSIL World Report  



WORLD FURNITURE OUTLOOK ON GLOBAL MARKETS

by Paola Govoni, CSIL Centre for Industrial Studies, Milan – Italy
World furniture consumption reached US$ 455 billion in 2014, with an increase of about US$ 17 billion over 2013. Expected rate of growth of furniture consumption for 2015 is +2.8% in real terms. The calculation is based on CSIL processing of data from official sources, both national and international, that cover the 70 most important countries. The apparent per capita consumption of furniture ranges from an average of US$ 53 per year in Middle and Low Income Countries to US$ 189 per year in High Income Countries. The worldwide average is US$ 86 per year. For the year 2016 furniture demand worldwide is forecasted to grow by +2.8% in real terms. A summary of forecasts of furniture consumption in the 70 countries (grouped by geographical region) is as follows:

Furniture consumption by geographical region, 2016.

Forecasts of yearly changes in real terms


The increase of furniture production in the Asia and Pacific region (passed from US$ 87 billion in 2005 to US$ 272 billion in 2014) is a major structural phenomenon, which has substantially changed the world furniture sector in the last ten years.

The leading furniture importers are the United States, Germany, France, the United Kingdom and Canada. In the last five years the increase of furniture imports in the US (from US$ 19 billion in 2009 to about US$ 32 billion in 2015) was the main engine of growth in international trade of furniture.


The main furniture exporting countries is China, followed at a distance by Germany, Italy, Poland and Vietnam. In 2014, for the first time in many years, Chinese exports were stagnant. The fastest growing furniture exporter (from a low base) is Vietnam.


If we compare the percentage breakdown of international furniture trade by geographic area in the year 2005 and in the year 2014, some interesting changes emerge:
• the 15 old members of the European Union lost about 14 percentage points
• the new EU members remained stable • the Asia and Pacific area gained about 18 percentage points
• the increase of imports into the United States (which grew by almost US$ 6 billion in current dollars between 2005 and 2014 after recovery from the recession slump) was accompanied by an increase in exports from China and Vietnam.
In summary, twelve countries have been the main protagonists of international furniture trade over the past decade, that is the seven major industrial countries plus China, Poland, Vietnam, Turkey and Malaysia.

The ratio between imports and consumption rose from 29.3% in 2005 to 30.2% in 2008, decreased to 27.2% in 2009 and remained below the prerecession maximum thereafter. The World Furniture Outlook report assumes that the international scenario will be as follows:

Evolution of World GDP. Annual percentage change in real terms
Source: IMF, World Economic Outlook, October 2015

In the last ten years world trade of furniture (defined as the average between total furniture exports from the 70 major countries and total furniture imports into the 70 major countries) has grown faster than furniture production and has consistently amounted to about 1% of world trade of manufactures. World trade of furniture amounted to US$ 94 billion in 2009 (19% below the previous year) and grew in the following years to US$ 134 billion in 2014. If the world scenario shown in the Table materializes, the forecast for world trade of furniture would be as follows: a contraction in current US$ in 2015 (mostly as a consequence of the depreciation of currencies of some major advanced economies in relation to the US$) and a resumption of growth in 2016 (+1%) and 2017 (+5%).


A sizeable percentage of international furniture trade is carried out within the economic regions into which the world economy can be divided:
• In the European Union (27) plus Norway, Switzerland and Iceland, 76% of foreign furniture trade takes place within the same countries;
• In the NAFTA area (USA, Canada and Mexico) about 28% of foreign furniture trade is within the three countries;
• In the Asia and Pacific countries about 41% of total foreign furniture trade is within the region.

On balance, trade within regions amounts to about 57% of total world furniture trade. Therefore, only one half of world furniture trade can be considered “global” in the sense that it takes place between countries in geographically distant regions. The most important of these flows are:
• From the Middle and Low Income Countries of Asia to the United States (72% of outgoing flows from this area) and to Europe;
• From the “new” EU members to Western Europe, especially to Germany.

Major furniture trading countries can be classified in three groups:
• Large producers for internal consumption, with high per capita income, high labour costs and a structurally negative balance of furniture trade: the United States, Germany, Japan, France and the United Kingdom. These countries together account for 31% of world consumption of furniture. The furniture trade deficit of this group of countries is rising, mainly because of the United States, where the deficit increased from about US$ 21 billion in 2005 to about US$ 26 billion in 2015.
• Large producers for both internal consumption and exports. Despite high per capita incomes and high labour costs, they have some specific comparative advantages: Canada and Scandinavia have ample forestry resources; Italy benefits from the peculiar organisation into productive districts with many small companies. The exports/production ratio for these countries together is about 52%. Canada exports 34% of production (mainly to the United States), Italy 57% and Scandinavian countries an average of 62%. Italy has a surplus in the balance of furniture trade amounting to US$ 9.0 billion.
• Other important producers which have a comparative advantage because of lower cost of labour: (i) China, Vietnam, Malaysia and Indonesia in Asia; (ii) Poland, Romania, Turkey, Lithuania and Hungary in Central Eastern Europe; and (iii) Mexico in Latin America. All these countries have a substantial furniture trade surplus.