Furniture maker sector trends

Man in cap building table in furniture making workshop

(last updated July 2019)

What has been happening in the furniture manufacturing sector

The furniture sector divides into three subsectors:

  • domestic
  • contract (public spaces such as hotels, schools, restaurants, airports etc)
  • office (desks, workstations, seating, cabinets etc)

Domestic customers account for approximately 70% of the market. The contract and office subsectors account for the remaining 30 per cent of the market.

The amount of money that people spend on furniture and furnishings is affected by the state of the economy and the housing market. When the economy is healthy, people move house more frequently and are prepared to redecorate and refurbish their homes. Businesses that are doing well have money to spend on improvements to their premises, including replacing items such as desks, chairs and storage units. When there is a downturn in the economy, people (and businesses) simply put off replacing furniture until they feel they can afford it. At times of austerity, central and local government spending cuts reduce spending on furniture for things like schools, hospitals and government offices.

Spending on furniture was buoyant during the early and mid 2000s because of the booming housing market. The market was also boosted by the popularity of home makeover TV programmes which helped people to see furniture as fashionable items that should be replaced regularly, not just when they're worn out.

Unfortunately the economy took a sharp downturn in 2008. The housing market collapsed too, causing real problems for the furniture industry and even leading to the demise of furniture retail giant MFI along with several other big furniture retailers. The economy remained very weak into the early 2010s, while the housing market was also very quiet. Things did begin to pick up though during 2013 and continued to improve during 2014 and the first half of 2015 but then slowed again in the second half of 2015 and into 2016.

As a result of the increased economic uncertainty following the Brexit vote in June 2016 consumer confidence in the economy fell. The decline continued throughout 2017 and into 2018 as household budgets came under strain and consumers put off expenditure on big ticket items and started shopping around for the best deal. The prospects for the furniture sector are cautious, with forecasts of only moderate annual growth of 1% up to 2020. Inflation and limited real growth in wages are putting pressure on consumers' disposable income, and property transactions, which were reduced during the second half of 2016, weakened further during 2017. Little change is expected in 2018 and 2019.

When fewer people are moving house, perhaps the best bet for furniture makers is to persuade people to brighten up their existing homes by buying some new items of furniture. The popularity amongst homeowners of extending their homes because of the high price of moving up to a larger property, particularly in areas where prices are high such as London, might also provide opportunities for additional furniture sales. Conservatories are seen as both useful additions and good investments so you might consider making furniture suitable for these. As homes get smaller, so that space is limited, sales of smaller furniture have increased so bear this in mind when planning your ranges.

The furniture sector has become intensely competitive, with widespread discounting by retailers which inevitably affects the prices that manufacturers can charge. The Scandinavian giant Ikea has come to be seen by many as the benchmark for stylish, affordable furniture at reasonable prices.

The fall in the value of the pound following the Brexit vote added substantially to the costs of the imported materials used by furniture manufacturers. The tightening economic conditions, with consumers reducing their spending in light of the economic uncertainty, means that not all manufacturers will be able to pass on in full these additional costs. Low prices and good value will be essential for making sales of big-ticket items. It may be that competition from abroad will reduce if the weak pound means that imported furniture becomes too expensive to remain attractive to consumers. For businesses producing furniture for export, the weak pound is good news, of course, as it makes their prices more attractive.

The internet

E-commerce has become hugely popular and has affected almost all retail sectors. While many people still prefer to be able to see and try out certain types of furniture, more and more people are happy to order items online. Both retailers and manufacturers have embraced e-commerce as a means of reaching a wider market, with some manufacturers using it to sell direct to the public. Many professional sellers use eBay as well as - or instead of - their own e-commerce website.

Unfortunately there seem to be quite a few unscrupulous furniture retailers on the web. Because furniture is large and bulky it is often not held in stock but ordered from the manufacturer when a customer places an order. Some sellers have shown themselves to be less than honest about availability and delivery dates, with the worst taking payment upfront and refusing to make refunds to dissatisfied customers.

Quality standards

One of the difficulties facing the furniture industry is how to inform consumers of the difference between high quality, safe and well constructed furniture items and cheap, inferior products which may look very similar but not last for anything like as long. Imports of furniture into the UK have increased in recent years. In 2007 the British Furniture Manufacturers Association (BFM) launched the 'Great British Furniture' campaign to encourage people to buy high quality British made furniture rather than cheap imports.

Following an Office of Fair Trading (OFT - since replaced by the Competition and Markets Authority) report into buying furniture that highlighted many causes of customer dissatisfaction, the industry set up Qualitas which was dedicated to improving standards within the sector. Qualitas became The Furniture Ombudsman - run by the Furniture Industry Research Association (FIRA) - in 2006. Membership of the Furniture Ombudsman scheme can help manufacturers and retailers to demonstrate to consumers that their products are of good quality.

The environment

During the 2000s shoppers became more concerned about ethical issues and the environment. This prompted some manufacturers to offer repair and reconditioning services to customers who would prefer to reuse old furniture rather than throw it away. There have also been moves in the industry towards reusing old furniture parts and components in manufacturing new pieces. Manufacturers can improve their environmental and ethical credentials by obtaining their materials from sustainable sources and by using recycled wood materials like chipboard and MDF.

Keeping up to date with developments

Joining a trade association is an excellent way of keeping up with developments in your industry.

There are a number of different associations and organisations that represent the furniture manufacturing industry, including the following:

  • the British Furniture Manufacturers Association (BFM). The BFM has an online manufacturer directory and publishes the Furniture Times newsletter
  • the Furniture Industry Research Association (FIRA). FIRA is dedicated to researching and developing quality standards for the furniture industry. It offers testing and product assessment services such as flammability testing and certification
  • the Guild of Master Craftsmen

You can find out more about these organisations and get contact details on their websites.

Subscribing to a trade journal is another excellent way of staying up to date with developments. Cabinet Maker is a weekly trade journal for the furniture industry.

Trade shows

You can get a lot of useful information by visiting a trade show for the furniture industry. Information about other forthcoming trade shows can be found on the exhibitions website.

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