May 19 2020

Furniture industry: majority expects losses of 20 percent

In recent weeks, the German furniture industry has suffered massively from the effects of the Corona pandemic. As a result of the temporary closure of furniture stores, manufacturers recorded a drastic decline in orders from retailers.

A joint quick poll by the Association of the German Furniture Industry (VDM) and the associations of the wood and furniture industry in North Rhine-Westphalia shows exactly how things are currently looking in the companies. Here, just under 80 percent of the companies reported that their order intake had fallen by more than 20 percent since the beginning of the Corona crisis. Due to the deterioration in the order situation and the lack of supplier parts, production capacities had to be cut back in many cases. Almost 80 percent of the companies introduced short-time working in April.

"In view of the difficult economic situation in our industry, we very much welcome the fact that the furniture trade was allowed to open up again throughout Germany," says VDM Managing Director Jan Kurth. He added that the reopening of shops was having a positive impact on the furniture industry. However, the increase in capacity is presenting producers with new challenges. "Here we need close cooperation in the industry, such as regular information on the delivery status from the industry and delivery possibilities in the trade," says Kurth.

The Corona crisis gave a boost to the online furniture trade. Due to store closures, more customers took advantage of the opportunity to buy via the Internet. Around 40 percent of the companies surveyed reported a revival in their online business.

Looking ahead to the coming months, however, the industry is extremely cautious. By the end of the year, a good 40 percent of the companies expect a decline in sales of more than 20 percent. Around 40 percent of manufacturers are preparing for losses of between 10 and 20 percent. It is estimated that the industry will be short of a good 3 billion euros in sales by the end of the year. Against this background, VDM is in favor of a broad-based economic stimulus program that does not target individual sectors alone.

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