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The European market for office furniture - Article by CSIL


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World Furniture - International Market Review #63 September 2014

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The European market for office furniture - Article by CSIL

  1. 1. SPECIAL REPORT STUDIES by Mauro Spinelli THE EUROPEAN MARKET FOR OFFICE FURNITURE CSIL International Market Research WORKSPACE he persistence of the market tur-bulence has somewhat upset the general conviction about the duration of the economic cycle. In T fact, before 2008 the office business in Europe registered two main critical peri-ods, one in 1993 and another in 2002, while since the dramatic drop of 2009 the sector remained stagnant and slowed down again in 2013. In this diffi-cult situation, companies are of course obliged to prepare their mid-term budg-et plans, but at the same time they are forced to adjust them on a “quarter by quarter” basis, because the trend of sales inevitably reflects on their invest-ment policy in machinery, R&D and marketing-distribution. In 2013 European office furniture pro-duction reduced by 5.6% to a value of EUR 6,735 million. The performance of international trade has been negative. The -0.8% decrease in exports (EUR 2,358 million) was accompanied by a reduction of imports (-5.8%, EUR 2,172 million). As a result, apparent consump-tion decreased by -7.3% over the year. Market openness increased in 2013 as exports/production ratio grew to 35% gaining two percentage points compar-ing to the previous year and imports/consumption ratio stabilized at 33% for both years. The market difficulties registered in the year gave new reasons for industrial restructuring process with a number of companies downsizing employment, entering insolvency procedures and EUROPEAN EXPORTS OF OFFICE FURNITURE, 1993-2013. PERCENTAGE CHANGES Source: CSIL processing operating factory closures. Starting from September 2013 a lot of plants closures have been announced in Germany by the most important manu-facturers in the office furniture sector. The number of workers continued to decrease falling by 1.9% on average compared to 2012, and it is expected to drop again in the current year. CONCENTRATION, COST REDUC-TION AND INVESTMENTS The market concentration in Europe continued to increase over the last years with top 5 manufacturers current-ly covering about 21% share of the whole market. Kinnarps is the largest player in terms of turnover, followed by Steelcase with a market share of 6.5% and 6.4%, respectively. Ahrend Group ranked third (gaining one position com-pared to 2012), followed by Haworth Europe and Bene Group which is undergoing a business reorganization. The European office furniture sector employed a total workforce of about 55,434 in 2013. The trend has been negative since 2008, recording a fall in 2009 and further decreases in the fol-lowing years. The majority of players now employ less people than in the past with some manufacturers losing until 60% of their employees in five years. The Italian Faram and Mio Dino have been placed in administration in May 2014, the two factories have been closed, resulting in a loss of 180 jobs. At the end of 2013 three Italian compa-nies have been put in liquidation: Castelli Spa, Iterby and Della Rovere. Several plant closures and conversions have been announced in Germany. The majority of them will be operated during 2014. Kinnarps, Haworth, Steelcase and Koenig+Neurath announced both factory closures and workforce reduc-tion in the current year. Kinnarps plans to cut its workforce by 50 positions out of 422 in its main pro-duction facility in Sweden in 2014. Already in 2013, the gorup had started a program to reduce costs and improve September 2014 - WF 13
  2. 2. SPECIAL REPORT STUDIES WORKSPACE EUROPE. OFFICE FURNITURE PRODUCTION, NON-RESIDENTIAL CONSTRUCTION OUTPUT AND GDP, 2003-2013 AND FORECASTS FOR 2014. PERCENTAGE CHANGES AT CONSTANT PRICES THE EUROPEAN MARKET FOR OFFICE FURNITURE This report offers a comprehensive picture of the office furniture market in 16 Western European countries, providing office furniture industry statistics (production and consumption, imports exports), office furniture prices, marketing policies and distribution, market evolution (2003-2013) and figures by country. A forecast on office furniture consumption by country in 2014 and 2015 is also given. The report analyses sales data and market shares of top European manufacturers. The 2014 edition contains a detailed analysis on office seating quantities and brand positioning. The number and the performance of swivel chairs sold in 2012 and 2013 and brand positioning by average “net price”, is given for six major countries (Germany, France, United Kingdom, Italy, Spain and Sweden). Values include both products manufactured in Europe and products imported from extra European countries. Publisher: CSIL, Publication date: June 2014, XXVI Edition, Language: English Available for online purchase and immediate download at Source: CSIL processing of official data * forecast synergy in production, in line with the worse-than-expected sales develop-ment. In Summer 2013 Martela announced a restructuring program aimed to achieve cost savings equivalent to annual EUR 6 million by the end of 2014. The princi-pal measures include production trans-fers among the Group’s different busi-ness locations and merging of support functions as well as reorganising and improving the productivity of poorly per-forming businesses. The personnel reductions and production transfers represent approximately 60% of the total cost saving plan. König+Neurath is in the process of closing its manufacturing facility in Weissensee/Thuringia, Germany (130 employees), and to consolidate its pro-duction at its Karben headquarters in Germany. In parallel with cost reduction policies operated by companies (especially in terms of workforce), the percentage of total turnover destined for investments started to increase again over the last years. On average European office fur-niture manufacturers dedicated 4.8% of turnover to investment activities. Promotion represented 1.0% of total turnover in 2013 and it has been decreasing since 2003. Investments in machinery stabilised at 1.5% of total sales. Companies continued to invest in design and product development, which remained almost stable at 2.3% of total turnover. EXPECTATIONS FOR 2014 Europe expects a moderate GDP real grow in 2014 (+1.2) and a slow decrease (-0.4%) of non-residential construction output. According to the last available figures from Eurostat the office furniture business started 2014 with a slow increase of export activities, in particular +0.7% export growth in January-February 2014 (compared to the same period of 2013). Regarding the European office furniture output at constant prices, CSIL is fore-casting for 2014 an increase of 1% on the previous year. WHICH PROSPECTS FOR EU COUN-TRIES? In 2014 largest GDP increases are expected for Sweden, United Kingdom, Norway, Switzerland and Germany, while Greece, Italy and Finland will increase slowly together at a rate lower than 1%. A general stagnation is pre-dicted for the remaining countries. For 2015 a better outlook is expected for Sweden, Ireland and Greece (real GDP growth about 3%), followed by the United Kingdom, Norway, Spain and Germany, which will record increases between 2.5% and 3%. 14 WF - September 2014
  3. 3. WORLD FURNITURE - International Market Review About Us World Furniture – International Market Review is a quarterly review of economic information and market analysis. This magazine offers contributions on international furniture and furnishing markets, demand and supply, retail and consumption, business trade country profiles trade, profiles, competitive systems, international events, fairs and exhibitions. Print issue is mailed to a selected target of 2000 manufacturers and suppliers in the world's main producing, exporting and consuming countries. World Furniture is also circulated at major international sector fairs. World Furniture – International Market Review is published by CSIL, Centre for Industrial Study, an independent research and consulting company specialized in applied economic research, EDITORIAL PROGRAMME 2015 World Furniture No. 65/March 2015 World Furniture No. 66/June 2015 evaluation of public investment projects, infrastructure project appraisal, support to development programs and policies, market analysis and SMEs economics founded in Milan (Italy) in 1980. World Furniture No. 67/September 2015 World Furniture No. 68/December 2015 TO SEE MORE CONTENTS VISIT www.worldfurnitureonline.ldf it li com