Shortly before the International Furniture Fair in Cologne, the German furniture industry is confident for the year 2016. In the first ten months of 2015, the industry achieved a turnover of 14.4 billion EUR, a 5.4% increase. For the full year, the Association of the German Furniture Industry VDM expects a sales increase of just over 5%.
For 2016, the economic conditions are still good. The expected economic growth in Germany of 1.6-2.2% will probably be driven by private consumption. Construction activity climbs thanks to lower interest rates. However, there are reasons not to be euphoric. In the second half of 2015, consumption indices in Germany went down significantly, while the global tumbling markets weakened confidence in security and economic stability. The imports pressure from the East and the Far East remains high. Overall, German furniture manufacturers expect in 2016 a further slight increase in sales of around 1%.
Sales growth in all segments
All segments of the German furniture industry reported higher sales in the first 10 months of 2015. For household furniture and other furniture, the largest segment of the industry, the rise was of 4.3% (to € 5.9 billion). VDM says that the growth in classical home furniture is significantly lower. In this segment, garden furniture, steel and plastic furniture, small furniture and furniture parts, have grown stronger.
The kitchen furniture manufacturers listed as the second largest segment of the industry posted a significant increase in sales by 6.1% up to € 3.8 billion. The office furniture industry had a turnover of around € 1.7 billion, a slightly positive result compared to last year (+ 1.6%). Due to strong export figures, German manufacturers of upholstered furniture reported strong sales, up 2.9% in January-October 2015 (to around € 870 million). The smallest segment of the industry -the mattres- grew significantly by 22.1% to approximately € 780 million.
Exports up sharply
The total export volume in the first ten months of 2015 reached € 8.4 billion, up by 5.6%. In the markets outside the EU, the weak euro made the German furniture cheaper and additionally stimulated export. One third of the German furniture exports is sold in non-EU countries.
Exports to the EU countries developed unevenly: exports to the UK increased by 9.2%, and those to Switzerland by 8.7%. Shipments to the Netherlands and Spain have jumped again. Exports to the Netherlands increased by 6.9%, while those to Spain by 22.4%. Exports to Germany's most important export market France, however, decreased by 1.1% and those to Austria also developed negatively dropping by -0.2%.
More German furniture went to China (+ 3.7 percent) and the USA (+ 23.9 percent). With an American low interest rate policy in 2016, favorable exchange rate developments are expected in the dollar zone, which could promote further furniture exports to the USA.
On contrast to the overall development, German furniture imports grew 5.2% through October, which is a clear sign of the high level of domestic competition. The main furniture suppliers to Germany are Poland (+ 4.7%), China (+18.2%) and the Czech Republic (+ 9.9%).
