THE FURNITURE SECTOR IN ITALY IN 2013-2015

According to the 30th edition of the ‘Forecast Report on the Furniture Sector in Italy’, 2013 will be another difficult year for Italian sector operators, after a tremendous 2012. The growth in international trade and the recession in Italy translate into a contraction in furniture production of 3% at constant prices, resulting from a foreign demand being limited by the performance of Italy’s principal trading partners and of the continuing weakness of domestic consumption (-6%), which was affected by the trends in employment and disposable income and by the prudent attitude of families towards the economic situation.

Opening of the Seminar

Looking at exports, in 2013 the expected growth in the global scenario will have positive repercussions on furnishings: demand from emerging markets will show signs of a more decisive recovery which Italian firms must be ready to intercept, while among the advanced economies only Western European countries will record a negative contribution to the growth in furniture exports. Thus, in 2013 exports are expected to grow by 1% at constant prices, resulting, on the one hand, from a weak domestic consumption of furniture on the leading markets of the advanced economies in Western Europe, and, on the other hand, from better prospects offered by emerging countries.
In 2014 international trade will show a higher growth with greater foreign demand expected for the sector and with weak signs of recovery coming also from the domestic market, although these will not translate into growth during that year. Over the two-years 2014-2015 the Italian economy will once again show growth rate between 1.3% and 1.6%, driven by domestic demand. The return to growth of disposable income (+1.2% at constant prices), sustained by the end of the decline in employment (+0.4%) will improve the climate of confidence among the families. For the furniture sector this will lead to a recovery on the domestic market, which in 2015 will finally record a positive rate of growth.

A NEW RESEARCH PROJECT

This year the ‘Forecast Report on the Furniture Sector in Italy’ contains the results of a new CSIL research project called ‘Opportunities for Italian companies on the global market 2013-2015’. The study outlines the winning characteristics of the furniture exporting firms and provides an overview of the internationalisation strategies implemented by Italian firms by sketching a map of the destination markets, evaluating their degree of attractiveness. With a domestic market in continuous decline, the only drivers to provide any oxygen to the sector are exports and the growth prospects of the foreign markets. In Italy there are roughly 5,000 exporting firms in the furniture sector and they represent 24% of all the active firms and a whopping 64% of sector employment; within this group there is a sub-set of operators that combine exports with other forms of internationalisation such as commercial agreements, joint ventures and productive investments. Firms were subdivided into five homogeneous groups: Domestic Oriented, Opportunity Driven, Entrants and Established Exporters, International Players and Front-Runners, each of them with well-defined characteristics and different rates of success over recent years.

THE WORLD MARKET FOR FURNITURE

The CSIL report ‘World Furniture Outlook 2013’ contains analytical data on the furniture industry and forecasts for the growth in demand for furniture in 2013 in 70 countries, of which: 35 European countries, 15 countries from Asia and the Pacific, 12 countries from the Middle East and Africa, 3 from North America and 5 from South America. According to the report, the world consumption of furniture amounts to some US$ 410 billion at factory prices (that is, excluding the distribution mark-up). This value (in current dollars) has doubled during the last 10 years.
The degree of openness of the markets (meaning the ratio between imports and consumption) is currently in the region of 27%. The major importing countries are the United States, Germany, France the United Kingdom and Canada. US imports recovered after the crisis of 2008 and 2009, and in 2012 they returned the levels of 2007.
China increased its exports from US$ 25 billion in 2009 to US$ 45 billion in 2012. Other large furniture exporters are Germany, Italy and Poland, and the United States. The international trade of furniture represents about 1% of the world trade for the whole manufacturing industry. This value could record a rapid growth until 2008 (US dollar 117 billion), followed by a sharp contraction of -19% in 2009 and a further recovery on 2010 and 2011. A growth of 4% is predicted in the world trade of furniture in 2012 and 2013.
The forecasts for changes in the demand for furniture in real terms in the major geographical areas are shown in Graph 3, which indicates a contraction for Western Europe, but growth for the world, thanks especially to the contribution from the emerging countries. A growth between 3 and 4% in furniture consumption can be predicted at a world level in 2013.

The two CSIL reports: “Forecast Report on the Furniture Sector in Italy. Opportunities for Italian companies on the global market 2013-2015” and “World Furniture Outlook 2013” have been presented during the annual CSIL Forecast Seminar held on 23 November 2012 in Milan. The Seminar celebrated this year its 30th edition and was attended by 250 participants (manufacturers, trade operators, representatives of trade associations, institutions and press). During the Seminar, a Focus Group took place coordinated by Massimo Florio with the participation of corporate and institutional representatives as keynote speakers: Giorgio Gobbi (Calligaris), Fabrizio Imelio (Emu Group), Paolo Martino (Rimadesio), Fabrizio Pascucci (sector Unions) and Mino Politi (Webmobili- Federmobili, Federation of Furniture Retailers). At a time when global economic indicators suggest new approaches to the market, their speeches focused on the presentation of strategies and recipes for the sector, with special attention paid to the paths chosen by some leading Italian companies to increasingly go international with new projects. More information on the contents of the CSIL reports “World Furniture Outlook 2013” and “Forecast Report on the Furniture Sector in Italy. Opportunities for Italian companies on the global market 2013 -2015” is available from www.csilmilano.com or www.worldfurnitureonline.com