German furniture industry: 2018 in figures

Germany’s kitchens industry is the European leader

With growth of 18.1 per cent compared with a rise of 5.5 per cent for 2017 as a whole, order levels for companies in the kitchens industry were extremely positive in the first four months of 2018. This is largely attributable to the market shake-out caused by the insolvency of the Alno Group, whose companies ceased production in September 2017.

The unfulfilled orders were picked up by other companies, leading to a noticeable upturn in orders. In the first few months of 2018, the increase in orders inside and outside Germany was almost equal. Exports have grown, while imports remain negligible.

The German kitchens industry thus confirms its leading position in Europe and is the only sector in Germany that currently has a positive foreign trade balance (exports of Euro 2 billion against imports of just Euro 102 million in 2017). Average prices rose slightly in the first four months of 2018.

The traditional furniture production region of Westphalia has proved particularly strong, with 58 per cent of the sector’s workforce generating more than 71 per cent of revenue for the entire German kitchen furniture industry.

Prices decline in the upholstered furniture sector

Germany’s upholstered furniture industry is performing less well. At the start of 2018, the decline of 2.5 per cent in domestic business was even surpassed by a contraction of 6.2 per cent in orders from abroad. This means that the upholstered furniture sector currently has the lowest export quota within the German furniture industry.

In contrast to 2017, the Association of the German Upholstered Furniture Industry (VdDP) has noted a drop in average prices for 2018, with consumers expecting low prices together with a high level of expertise and sound advice.

The association stresses that this is not a healthy trend, suggesting that manufacturers and retailers should instead jointly persuade consumers of the quality of their products, launch a targeted trade offensive and demonstrate more confidence in order to push through fair prices.

Structural change in home furnishings

The home furnishings sector is also enjoying healthy exports. In general, international business by the home furnishings sector performed significantly better last year (+2.8 per cent) than its domestic business (+0.6 per cent).

The current year got off to a pleasing start. Domestic business is traditionally very positive in January, as post-Christmas trade has a greater impact on the bottom line in Germany than anywhere else.

Nevertheless, the living room sector is facing a difficult structural adjustment: living room design is dividing into smaller and smaller units, wall shelving for books is no longer required due to the growing popularity of e-book readers and tablets, and flat screens are mounted directly on the wall.

Core export markets are in Europe

The German home furnishings industry is among the sectors with a significant trade deficit. In the first quarter of 2018, exports grew by 1.0 per cent and imports by 1.6 per cent. The core markets for exports are mainly in Europe: seven are in western Europe, plus Poland and the Czech Republic in eastern Europe and only the USA overseas.

Five of the ten most important countries importing furniture to Germany are located in eastern Europe, with Poland leading the way with a share of over 25 per cent. In western Europe, Italy, Austria and France rank among the top 10.

With an import volume of Euro 1.9 billion in 2017, China is the only significant source outside Europe and the second-largest importer after Poland.

Lack of young workers in the furniture industry

The furniture industry is suffering from an ageing workforce. Only 35.2 per cent of employees in the sector are under the age of 40. The ageing workforce is particularly noticeable in the upholstered furniture sector, where 78.8 per cent of staff are at least 40 years old.

The situation is different for manufacturers of bathroom and kitchen furniture, who have succeeded in significantly reducing the average age in recent years: only 56 per cent of employees are over the age of 40, a lower proportion than in the entire German commercial sector.

The kitchens industry is thus proving to be innovative in terms of personnel as well and once again serves as a role model for the entire German furniture industry.