European furniture consumption and production experienced significant declines in 2023, as highlighted in the latest bulletin from the International Tropical Timber Organisation (ITTO).
According to ITTO, production fell by 8% and consumption by 11% in 2023, following similar declines of 11% and 12% in 2022. Wood furniture production in the EU27+UK was valued at €39.7 billion, with consumption at €39.4 billion.
ITTO noted that these low levels have not been observed since 2014, except for a steep drop in 2020 during the height of the COVID-19 pandemic. The organization attributed these changes to significant shifts in supply and demand patterns since the pandemic, including trade flows, consumer preferences, working conditions, distribution channels, and design trends. The industry is adapting to these changes with new strategies.
The European wood furniture sector initially faced a short-lived demand drop in Q2 2020 during the first COVID-19 lockdown, followed by a rapid demand surge in 2021 driven by a home improvement boom. This period coincided with material shortages and logistical challenges that limited availability.
The geopolitical instability, including the war in Ukraine, led to a spike in energy prices, exacerbating existing inflationary pressures. Rising interest rates and reduced consumer spending, after a period of high spending in the previous two years, resulted in a significant decline in demand from mid-2022 through 2023.
These trends are reflected in the changing value of wood furniture production, trade, and consumption in the EU27+UK. The figures highlight the downturn in the European economy. In 2023, Europe faced increased uncertainty, slow economic growth, and a notable slowdown in the construction industry.
Consequently, consumer demand for furniture, particularly in the lower and mid-price segments, was under pressure. Inflation, especially energy costs, and rising interest rates strained household budgets. Renewed spending on discretionary categories like travel also impacted the furniture market.
The cost of producing furniture in the EU continued to rise in 2023. High energy prices, capital costs, and rising labor expenses could not be fully passed on to customers, significantly reducing profitability. Additionally, extra-EU export opportunities, particularly to the US and China, were not robust enough to support EU production. The industry saw various bankruptcies, layoffs, and downsizing plans, with manufacturers being forced to increase list prices during the year.
Performance in the furniture sector varied widely across European countries. Eurostat data indicated that while overall EU27 furniture production in 2023 was near 2015 levels, several countries, including Romania, Belgium, Sweden, Germany, Netherlands, Denmark, and France, experienced production declines.
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