About the Furniture Industry    

Introduction

UK furniture manufacturing is a substantial industry. It contributes £8.3 billion to the country’s GDP, which equates to almost 2% of manufacturing output, and employs 112000 people within 8360 companies. In addition to this, it is estimated that the industry comprises 18800 self employed individuals and an estimated 25000 interior designers generating an annual value of £2 billion. Furniture, furnishings and beds encompass a diverse range of products and markets, traditionally segmented into 3 sub sectors based upon the purchaser’s characteristics:

  • Domestic: serving the public, mainly through retail outlets and for household use.
  • Contract: furniture for public areas such as hotels, schools, cruise liners, hospitals, restaurants, residential accommodation, stadia and airports.
  • Office: desks, work stations, seating, tables, cabinets and other items for the office environment.

Companies often serve more than one market. In particular the distinctions between the office and contract sectors are becoming blurred, while some manufacturers are supplying both domestic and contract end users. It is estimated that 30% of the UK’s furniture manufacturing turnover is attributable to the office and contract sub sectors.

Structure

The industry has a high proportion of micro and small to medium size businesses. Only 315 companies report turnovers in excess of £5 million and 82% of companies turn over less than £500k per year. This pattern is reflected in employment figures with 86% of companies employing less than ten people, while only 60 companies employ more than 250.

Despite its contribution to the UK economy, furniture manufacturing suffers from lack of recognition at a political level. The industry has no traditional regional hub, with manufacturing spread across the country. As a consequence, and with much industry support now targeted on a regional basis, it is considered that the industry does not secure the support and influence from government that is appropriate for its size and contribution to the economy.

The UK furniture market

The home furniture market rose by 20% between 2001 and 2008 (to almost £13.3 billion), although, taking inflation into account, the market is considered to have remained static in real terms. The overall growth in furniture manufacturing was 4% which, in real terms, reflects a gradual decline in output. This is a reflection of the pressures imposed by ever increasing imports, which doubled over the same period, compared with a rise in exports of only 22% (an increase almost solely attributable to inflation). The furniture trade gap has more than doubled since 2001.

Import growth is primarily driven by China (27%), followed by Italy and Germany (14% and 10% respectively). Chairs, seats and “other furniture” account for the majority of imports, both in value and as a percent of the home market. Office and shop, plus kitchen furniture markets, experience relatively low levels of imports compared to the sizes of their home markets.

The main destinations for exports from the UK are the Republic of Ireland and the USA (29% and 12% respectively), followed by Germany and France (8% and 7%).

Economic downturn

Official 2009 manufacturer sales figures for the furniture sector have not been released at the time of writing this summary. However, it is clear that weaker demand across the world economies will inevitably have an impact.

Despite the fact that the first hints of financial problems in the UK were emerging in August 2007, furniture manufacturing remained relatively resilient until the end of the second quarter of 2008. As with other manufacturing industries a dramatic drop in output only started to occur towards the end of the year. 2008 then heralded a 22% drop in furniture production. There was a partial recovery towards the end of 2009, but output was still, on average, 13% lower than in January 2008.

The generic term “furniture” within this document means furniture, beds and furnishings