The European furniture sector is still grappling with the COVID-19 pandemic, with no certainty yet that the most dramatic swings in supply and demand are in the past.
Several European countries, including France and Italy, were reporting record numbers of new daily COVID cases in the last week of January, the increase due to the emergence and rapid spread of the new Omicron variant, first detected in South Africa. As a result, they are again in the grip of government lockdowns.
According to Oxford University’s Stringency Index, a composite measure of the level of lockdown across nine metrics, such as school and workplace closures, restrictions on public gatherings, stay-at-home requirements, restrictions on travel, and others, on a scale of 0 (no measures) to 100 (strictest response), at the end of January the score for Germany, which is 84, was the highest in the world, while Italy and France, scoring 77 and 69 respectively, were also high by international standards.
More positively, the Stringency Index for the UK, where the full effects of the Omicron variant first became apparent in Europe, was down at 48 as the government has moved to reduce restrictions as the current wave of the virus seems to have peaked.
This has contributed to rising optimism that the Omicron variant, while highly infectious and still dangerous, does not lead to the same proportion of hospitalisations and deaths as previous variants, at least where a large proportion of the population is vaccinated or has been previously exposed to the virus.
While there is still no certainty, there is more confidence that the market situation for furniture in Europe will begin to normalise during 2022, at least to the extent that it will be less affected by sharp changes in demand and clogged up supply chains than in the previous two years.
There is also greater clarity now on the immediate impact of the first few waves of the pandemic and a widening pool of data to work out what the longer-term effects of the pandemic might be.
Data on global furniture consumption just published by Centre for Industrial Studies (CSIL), the Italy-based furniture industry research organisation, shows that after the initial shock when the pandemic hit in the first half of 2020, the European and wider global market for wood furniture picked up rapidly. According to CSIL, “the prolonged period at home has influenced consumers’ priorities and how to buy products, with a strong growth in online purchases”.
CSIL also noted that the lockdown experience changed the experience of living at home while working, which in turn led to changes in the types of furniture required by Europe. With people spending more time at home, functional spaces for the whole family became useful and modular furniture also became suitable for working from home. Greater attention is given to not only the home office environment, but also to the kitchen, the comfort segments, from mattresses to upholstery, and the outdoor furniture.
This led to a greater proportion of spending being directed towards furniture, since consumers wish to improve their living standards, allocating portions of income previously for outdoor expenditure to furniture buying.
The overall effect was to limit the scale of the contraction in furniture consumption during the initial phase of the pandemic. CSIL estimated that the value of furniture purchased worldwide in 2020 was US$415 billion, around 6% less than the previous year.
The contraction in 2020 was particularly large in the office furniture sector, following the decline in investment by both industry and the service sector, but demand in other sectors including kitchens and outdoor furniture remained more resilient.
Such was the strength of the rebound last year, driven by the boom in consumer spending on furniture. CSIL reckoned that worldwide furniture consumption was already back to the pre-pandemic level in 2021. The recovery is expected to strengthen and widen, in terms of geographic scope, during 2022.
The CSIL forecast for furniture consumption growth in the EU, UK, and European Economic Area (EEA) countries, at 4.4% in 2022, is particularly encouraging, being the largest for any global region. However, this partly reflects a weaker rebound compared to other regions – particularly the US – in 2021.
CSIL believed that the extra government stimulus from the EU Recovery and Resilience Facility, which is filtering through more slowly than national level stimulus measures around the world, will be an important driver of consumption in the EU during 2022. It also reckoned that furniture consumption worldwide will grow by around 3.9% this year, with growth in North America expected to be 4.0%.
Growth in other areas of the world is expected to be somewhat slower, including Asia-Pacific at 3.8%, the Middle East and Africa at 3.3%, Europe outside the EU, inclusive of Russia and Turkey, at 3.0%, and and Central and South America at 3.0%.
CSIL’s optimistic assessment of near-term strong furniture market growth at a global level is reflected in other analysis. For example, Statista’s Consumer Market Outlook estimated that revenue from the global furniture industry, which hit $1.3 trillion in 2020, will rise consistently to reach $1.6tn by 2025.
Source: ITTO
