Customer Report: Furniture | 43
SUMMARY
■ The furniture sector is more upbeat than last year
■ Turnover is ahead of last year ■ Output has beaten expectations ■ Raw material supply and rising costs are a cause for concern
BRITISH FURNITURE BOUNCES BACK
Raw materials supply and rising costs are a cause for concern in UK furniture making, but the sector is in positive mood, according to trade body British Furniture Manufacturers
Respondents to British Furniture Manufacturers’ (BFM) last Trade and Price Trends Survey in April expressed a high degree of confidence in market growth as the economy emerged from renewed lockdown.
Despite furniture shops having been shut and a lack of contract work in previous months, plus mounting concern in the sector about rising costs, 84% stated they were more upbeat about the general business situation than they were at the time of the previous survey last October.
Latest figures from the Office for National Statistics (ONS) posted on the BFM website (
www.bfm.org.uk) indicate that manufacturers’ optimism was justified. The ONS reported the industry’s turnover in April at £648m, rising to £677m in May, twice the total for the same month in 2020. This gave a first five months’ turnover total of £3.3bn. That was still 14.7% below the 2019 figure of £3.86bn, but 21.6% ahead of the £2.7bn for the same period last year. Most recent ONS figures reported by BFM show the recovery of UK furniture manufacturing strengthening further, with turnover in June at £779m. That was 65.2% up on the same month in 2020, 9.6% up on 2019 and, said the BFM, the highest June sales total since records began in 1998. In the organisation’s latest survey, 63% of respondents said that trade was better than the same time in 2020 and, further underlining their positive outlook, 42% expected to recruit new staff in the next six months.
Output over the previous six months also beat expectations, according to 69% of
companies, while 40% said new orders were better than anticipated.
“Both these measures of performance are expected to improve still further as we go through the summer months,” said the BFM. The cloud to the sector’s silver lining is the steeply rising price of raw materials. “It is a major issue for the industry with reports of increases of up to 20% for board and springs, 30% for plywood and steel, 15% for timber, 25% for assembly parts and 50% for foam,” said the BFM.
The vast majority of furniture makers, it added, had no choice but to increase their own product prices as costs and overheads rose.
“A balance of 94% of respondents in our survey were doing just this and, in general terms, prices were increased by more than we’ve seen in previous surveys,” said the BFM. “Some 74% of the sample reported raising prices in the range of 5% and 10%. Despite this, margins again were eroded, with a balance of -22% stating that they had declined since October last year. The majority also reported other cost increases, which would have impacted on profits. In spite of furlough, a balance of 67% reported increased labour costs and 79% overheads.” The summer has seen the cost of furniture
makers’ materials and fuel continuing their upward trend. ►
BFM PROVIDES A UNITED FURNITURE FRONT
The mission of British Furniture Manufacturers is “to enhance members’ businesses and business interests”. It is open to manufacturing companies across the sector, including upholstery, cabinet, bathroom, kitchen and office furniture makers and producers of mattresses and beds. It provides regular industry updates via its website’s news and blog sections, and also analyses key figures and trends in Economic Updates, to help members identify opportunities within the sector. The BFM is also focused on lobbying and advancing the interests of the furniture industry directly with government and through the British Furniture Confederation and the All Party Parliamentary Furniture Industry Group of the House of Commons. ■
www.bfm.org.uk www.ttjonline.com | September/October 2021 | TTJ
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