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According to CSIL, world consumption of upholstered furniture is worth nearly US$ 81 billion, recovering from the pandemic-induced contraction and even surpassing 2019 levels by over US$ 10 billion.
In 2021, world upholstery consumption increased by about one-fifth in current US$ compared to the previous year, and by more than one-tenth when compared to 2019.
CONSUMPTION OF UPHOLSTERED FURNITURE
About 80% of world upholstery consumption takes place in ten markets. The largest of these are the United States, China, Germany, and the United Kingdom.While total consumption is changing slowly worldwide, there are major variations in the composition of consumption in almost all major markets. All of the main consuming countries showed increases in consumption levels in 2021.
Chinese levels of consumption recovered, slightly exceeding 2019 levels, after having observed a significant drop in 2020. In the main consuming countries, the increase of consumption in 2021 was substantial in India, Australia, and Canada, as well as in several European countries (particularly in the United Kingdom and France).
Large markets showing a positive performance include the US, China, and Germany. There has also been an increase in the openness of upholstered furniture markets demonstrated by the steady but significant increase in the proportion of imports on consumption in countries such as France, Germany, the United Kingdom, and the United States.
INTERNATIONAL TRADE
International trade of upholstered furniture has been increasing in current US$ every year since 2016.In 2021 the growth over 2020 was 29%, a dramatic rate of increase compared to all previous years. This extraordinary growth was partly a consequence of increases in transportation costs.
The increased exports were mainly from China, Vietnam, Poland, and Italy, but also Germany and Mexico. With supply chain and freight issues taking place, a revived interest in Mexico has been noticed, as a target country for investments in production.
The growth is expected to continue in 2022 and 2023, however, uncertainties stemming from inflation, exchange rate fluctuations, and high transport costs must all be taken into account.
FACING MULTIPLE CHALLENGES
Within the furniture industry, the upholstered furniture sector is one of the most global internationalized segments, both in terms of trade flows and productive fragmentation, with manufacturers often organized in global value chains.Due to this high degree of internationalization, the multiple challenges that have had a global impact in recent years have created particular challenges for upholstered furniture manufacturers that still have not been completely resolved.
Upholstered furniture manufacturers have implemented actions along the supply chain such as increasing the number of suppliers and shortening the supply chain in order to be more local. Moreover, due to the increasing difficulties and long delivery times from Asian countries, European manufacturers are starting to purchase finished products and/or raw materials from other, mostly Eastern European countries.
Clearly, the global geopolitical context has affected many manufacturers in Europe that were traditionally dependent on imports from Russia and Ukraine, and in recent months some manufacturers have had to resort to other suppliers in different countries.
Another issue that has been affecting the upholstered furniture industry is the increase in prices of raw materials. Due to these price hikes, as well as those related to transportation, most upholstered furniture manufacturers have reviewed their list prices upward.
Although high order backlogs and long delivery times will create a time lag in the implementation of price increases, more than one upward review of list prices is expected during 2022.
