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The Belgian furniture industry in 2016: armed for the future, but caution advised
Source:Fedustria     November 09,2016



 

Belgian furniture

 

On the occasion of the Brussels Furniture Fair that will be held at the Heysel exhibition halls from 6 to 9 November 2016, Fedustria, the Belgian federation of the textile, wood and furniture industries has measured the economic situation of the Belgian furniture sector.

 

The Belgian furniture industry generated a turnover of 1,261.7 million Euros in the first half of 2016, a rise of 3.2 % compared with the first half of 2015. This means that 2016 has begun better than the previous year, which was considered more a year of stabilisation. The question remains whether this positive evolution will be kept up in the coming months. Indeed, the production capacity utilisation rate is encouraging and investment levels are good, however the Brexit is also causing a certain unease in the industry and the financial markets, and consumer confidence and furniture order levels are in the red.

 

Investments and production capacity utilisation rate

 

During the first half of 2016, the Belgian furniture industry invested 44.7 million Euros, which is 8.1 % more than in the same period last year . In this way the trend in increased investment that began last year was continued.

 

The Belgian furniture industry's production capacity utilisation rate has now exceeded 75 % for 10 quarters in a row, and has been above 80 % for 5 quarters in a row. A slight decline has been visible over the last two quarters. This is probably influenced by the heavy decline in the rate of furniture orders.

 

Employment level

 

Employment in the Belgian furniture industry stood at 11,150 staff across 844 companies in 2015. In other words: employment in the Belgian furniture industry is being well maintained.

 

Order levels in the furniture trade

 

According to the monthly survey by the National Bank of Belgium, the orders received in the Belgian furniture trade in the first eight months of 2016 declined cumulatively by 2.1 %. The only ray of hope after a poor start came in the month of June, but the rate then dropped down considerably during the summer months, leading to a poor discounted sales period.

 

Foreign trade and import

 

2015 was a good year for Belgian furniture exports, with a global increase in exports of 5.5 %, primarily thanks to the good export levels to other EU countries, the Middle-East and North America.

 

Despite continued growth being evident in the first 6 months of 2016 the actual result of +1.8 % is considerably more moderate. Within the EU, exports have grown by 3.7 %, with a light increase to France (+1.5 %), the Netherlands (+3.4 %) and Germany (3.7 %), these being our top-3 export markets by far.

 

Filip De Jaeger , deputy general manager responsible for the furniture sector at Fedustria : “There may well be considerable changes in the exports to the United Kingdom as a result of the Brexit. This is likely to depend heavily on the product. There is already a direct impact due to the strong decline in the value of the British pound, which in turn puts pressure on the margins and/or volumes of those exporting. This should already start to show in the figures for the 2nd half of 2016.”

 

On the import side we see the opposite trend, with a slight increase of 0.9 % in the first 6 months. Imports from EU countries grew by a total of 2.4 %.

 

Forecast: Caution is advised, the consequences of Brexit are hard to predict

 

The Federal Plan office anticipates that, after two years of moderation, the world economy will grow slightly in 2017, led by the US and emerging countries. Economic growth in the eurozone, as the most important export market for the Belgian furniture sector, is also likely to remain moderate due to uncertainty around the consequences of the Brexit.

 

Taking all these elements into consideration we still expect a slight growth in furniture activity in 2017. However, caution is advised.

 


Fedustria is the federation of the Belgian textile, woodworking and furniture industry. These sectors represent a total turnover of 11.1 billion Euros and employ 38,446 staff.

 

Taken separately, the Belgian furniture industry represents a total turnover of 2.36 billion Euros and provides 11,150 jobs.

 

(Source: Fedustria)

 

 

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