The furniture industry is a labour-intensive and dynamic sector dominated by small and medium-sized enterprises (SMEs) and micro firms. EU furniture manufacturers have a good reputation worldwide thanks to their creative capacity for new designs and responsiveness to new demands. The industry is able to combine new technologies and innovation with cultural heritage and style, and provides jobs for highly skilled workers.
Why the EU furniture industry is important
- Employment - the sector employs around 1 million workers in 130 thousand companies generating an annual turnover of around €96 billion;
- Trend setting - EU furniture manufacturers set global trends. About 12% of designs registered in the European Union Intellectual Property Office relate to this sector;
- High-end segment - the EU is a world leader in the high-end segment of the furniture market. Nearly two out of every three high-end furniture products sold in the world are produced in the EU.
Challenges faced by the furniture sector
The furniture sector has been severely hit by the recent crises and has faced a significant drop in the number of companies, jobs, and turnover. The main challenges are:
- Competition – the EU furniture sector faces enormous competition from countries having low production costs. China’s penetration into the EU market is growing rapidly and it is now the largest furniture exporter to the EU, accounting for over half of total furniture imports to the EU.
- Innovation - the reliance on innovation and design combined with an increase in global trade and digitalisation, makes the sector more vulnerable to weak protection of intellectual property rights. Boosting research and innovation also requires finance that is often inaccessible to SMEs.
- Structural problems - the ageing workforce combined with difficulties in attracting young workers may lead to disruptions in maintaining skilled workers and craftsmanship.
- Trade - protectionist measures on international markets create market distortions and decrease the sector’s competitiveness. EU furniture producers face both duties on imports of raw materials and tariffs on exports of finished products. Moreover, operational costs in the EU are higher due to high environmental, sustainability, and technical standards.
Opportunities for the furniture sector
The EU furniture sector has undergone significant changes to make it more export-oriented and to focus on upgrading quality, design, and innovation. These changes include restructuring, technological advances, and business model innovations. The main opportunities ahead lie in:
- Investment - continuing investment in skills, design, creativity, research, innovation, and new technologies can result in new products which are in line with the changing population structure, lifestyles and trends, as well as with new business models and supplier-consumer relationships.
- Research - research in advanced manufacturing technologies can result in the creation of high technology and knowledge intensive jobs, which would give the sector the attractiveness it needs to attract employees from younger generations. This could help rejuvenate the sector while keeping it highly competitive on the world stage.
- Access to new markets – EU furniture manufacturers are recognised worldwide for their quality and design. This creates opportunities for the sector to further seize other markets, in particular in high-end segments and emerging economies.
- Synergies - with construction and tourism could also be exploited, building on the sector’s excellent track record in sustainability. Specifically, the reliance on raw materials from sustainable sources used in the furniture production could have a positive impact on sales among environmentally concerned end-users.
- A Blueprint for the EU Forest-based Industries;
- Communication on a new EU Forest Strategy: for forests and the forest-based sector;
- A new EU Forest Strategy: for forests and the forest-based sector;
- Study on the EU furniture market situation and a possible furniture products initiative (4 MB, CEPS, Economisti Associati, CSIL and Demetra) - November 2014. See Executive summary (259 kB) - Annexes (5 MB).
GROW-I1ec [dot] europa [dot] eu (GROW-I1[at]ec[dot]europa[dot]eu)