ECONOMY

Imports take larger share of growing furniture market

Greek and European domestic furniture production will continue to decline at least until 2006, a report by business research firm ICAP says. The local production dropped by 4.9 percent annually in the 1998-2004 period, falling to 1.7 million units last year from 2.3 million units in 1998. The total value of Greek-made furniture is expected to drop to 300 million euros next year from 381 million euros in 2004 and 400 million euros in 2002. There had been slight growth in the 1998-2000 period, linked to the rise of the stock market, reaching 411 million euros at the end of 2000. At the same time, the value of imported furniture rose significantly, posting an annual 13.4 percent rise in the 1999-2003 period. In 2006, it is projected to reach 270 million euros from 113.9 million euros in 2002. In total, the turnover of the local furniture market is projected to rise to 570 million euros next year from 490.5 million euros in 2002, although the local to foreign furniture ratio will have been reversed in favor of imported pieces. The reason for the drop in production lies in the reduction of many small and medium-sized producers due to increased competition: Low-cost imported furniture undermines the growth potential of smaller producers and concentration trends in medium-sized and large enterprises are projected to rise further. Recent years have seeen a trend toward importing non-brand-name furniture of lower cost and quality from Eastern countries. Also expanding is standardized furniture and that which buyers assemble themselves. Its mass production allows for lower prices. The share of imports is increasing, taking 29.6 percent of the market from 8.8 percent in 1998. By contrast, exports have only risen to 2.31 percent of local production from 2.19 percent in 1998. The average growth rate of imports was 14.9 percent, taking imports to 460,000 units at last year’s end, from just 2,000 units in 1998. The main country of origin remains Italy, but the percentage of imports from eastern countries, such as China, Indonesia and Turkey, has risen considerably. Greek products’ main market is Cyprus. Sitting- and dining-room wooden furniture accounted for the biggest slice of imports in 1999-2003, taking up between 44.6 percent and 48.6 percent of the total. These products rose annually by 13.2 percent, reaching 66.7 million euros in 2003. Wooden bedroom furniture covered between 9.3 percent and 16 percent of imports in the same period; its value grew annually by 20 percent and reached 16 million euros at the end of 2003. In Europe The European furniture market is the world’s biggest, with Germany topping the consumption chart in the EU with 24 percent. Italy (17.3 percent) and the UK (14.3 percent) follow. Average furniture consumption per head in the EU has risen to 181 euros. EU furniture production is estimated to fall to 60 billion euros this year from 68.8 billion euros in 2003 and 82.2 billion euros in 2001. The equivalent production in the US was at 48.7 billion euros in 2003 and global production at 190 billion euros that year.