According to surveys conducted by the Ukrainian Association of Furniture Manufacturers, as a result of military operations on the territory of Ukraine, about 5% of furniture enterprises were completely destroyed. According to the same State Statistics Committee for 2022, the number of registered enterprises and entrepreneurs with the KVED code 31 “furniture production” decreased by 12.9%, that is, ⅛ of the industry ceased operations.
At the same time, according to the State Statistics Committee, the amount of capital investments for 2022 amounted to 32.8 million US dollars, of which more than 60% was invested in equipment and over 30% in construction. In total, during the period from 2012 to 2022, furniture makers invested $418.7 million. Wood processing enterprises invested $1.9 billion over the same period, of which $212 million will fall in 2022. The share of capital investments in the woodworking and furniture industries in the total volume of capital investments in Ukraine amounted to 2.26%. It is worth noting that the incentives became possible, among other things, thanks to grant programs from the government of Ukraine, USAID, GIZ and other partners.
Since individuals and entrepreneurs do not submit financial statements under the simplified taxation system, and there are more than 85% of them in the industry, one can imagine that the real amount of investment in production is much greater than can be seen in the State Statistics Committee data.
Before the start of Russia’s full-scale invasion of Ukraine, the volume of the domestic furniture market was estimated by experts at 1-1.2 billion US dollars.
At the moment, retailers such as Epicenter, Jysk, MebelOK.com claim that they have reached or even exceeded the achieved sales level in certain months, beyond the extreme limits, in hryvnia equivalent. The market decline of 20-35% is also consistent with the positions of cheese suppliers (chipboard, polyurethane foam). Various estimates place the size of the domestic furniture market in 2023 at 700-800 million US dollars.
According to the co-founder of MebelOK.com, the share of online furniture sales is about 12-15%. Despite the reduction in the decline in 2023 to -10-20% compared to 2021, competition in the online sphere has increased significantly.
Ukrainian manufacturers in 2022-2023 had the opportunity to replace more expensive imported analogues with their own goods and gain a larger market share. Furniture imports fell from US$582.3 million in 2021 to US$311.6 million in 2022, with US$315.4 million worth of imports in the 11 months of 2023.
The fall in demand for furniture in Ukraine is precisely confirmed by the interest in search queries in this area. For example, the word "sofa" in Ukrainian and Russian in November 2021 had a conditional score of 100 (the highest for the period from December 2020 to November 2023). By the beginning of the full-scale invasion, the average interest in this word in Ukraine was 54. During the war, this figure dropped to an average of 35.
The TOP 5 regions where users searched for sites for purchasing sofas upon request of the same word in the period from December 2020 to February 2022 included Sumy, Chernihiv, Donetsk, Poltava and Kharkov regions. From the beginning of the full-scale celebration of Russia until November 2023, the TOP 5 regions of interest in purchasing sofas include Kirovograd, Kharkov, Kyiv, Chernivtsi and Sumy regions.
From the beginning of 2009 to 2021, the export of Ukrainian furniture (in the group of 94 products) increased annually by an average of 13.5%, starting from 0.2 billion US dollars and reaching a record 2021 figure of 1.1 billion US dollars. In 2022, we managed to maintain exports at US$0.8 billion, of which 91.1% were from the European Union.
“When comparing JYSK purchase volumes in Ukraine in 2023 with 2021, the company increased purchase volumes of physical units by almost 20% in euros,” reports Irina Romanchuk, purchasing manager of JYSK Ukraine LLC. – JYSK is ready to support Ukraine by increasing the volume of purchases, provided that Ukrainian manufacturers are ready to switch to European operating standards and introduce environmental and social initiatives at their enterprises.
For 11 months of 2023, goods worth 0.73 billion US dollars were exported. The share of furniture exports in the total volume of goods exports from Ukraine during this period amounted to 2.2%.
In 2023, the structure of exports by partner countries changed. Thus, compared to the same period in 2022, the share of exports to Poland decreased from 35.1% (264.6 million US dollars) to 29.5% (215.2 million US dollars), while the volume of exports to Germany increased significantly. by 17%, from 129.3 million US dollars to 151.3 million US dollars, correspondingly increasing the share from 17.2% to 20.7%.
The total export volume for January-November 2023 is 3.2% less than the same figure for 2022, and the main reason for this is the blocking of the Polish-Ukrainian border. Trucks loaded with furniture queued for weeks at the border in November 2023, with only a small portion delivered by vehicles with a carrying capacity of up to 3 tons. It is expected that pent-up demand in November and the lifting of the border blockade with Poland will allow the order to be fulfilled and exports for 2023 to reach US$810 million, as well as a significant increase in export volumes next year.
Source: uafm.com.ua (Ukrainian Association of Furniture Manufacturers)
