Red alarm for the wood-furniture industry: companies are paying the price of the crisis and, if the government does not implement strong measures to support industrial activities – from the confirmation of tax allowances (not related to building renovation) to a new credit policy – the risk will be the loss of over 100,000 jobs. Plus, obviously, a huge loss of competitiveness in a highly competitive global scenario. This was the message by Rosario Messina, FederlegnoArredo president, who presented the 2009 preliminary figures processed by the Cosmit/Federlegno Arredo study center. “We have paid a very high price for the excesses of international finance, we have carried most of the weight of the crisis alone, and the final result is as bad as it could be: our industry has lost 20 percent of its production value, while global finance has partially gone back to pre-crisis behaviors”, Messina said.
After 2008, when the losses of the wood-furniture industry had been limited to 5.6 percent in turnover (combined with -7.8 percent in domestic consumption and -2 percent in export), 2009 closed with a 20 percent drop of turnover, mainly due to a 23.5 percent reduction of export. The trend was characterized by a “deep freeze” of orders in the first quarter, followed by further worsening in the second and a flat third quarter, though with weak signs of market rally.
The furniture industry (a macro sector including home, office and other furniture, bathroom furniture, lighting fixtures, furniture accessories and complements) suffered from a 17.3 percent turnover reduction, as a result of 23 percent export shrinkage and 16.7 percent import drop; so, the trade balance was negative by 24.9 percent compared to 2008. This trend was mainly due to the reduction of demand from traditional destinations of made-in-Italy furniture, including France (-12.0 percent in value), Germany (-10.1 percent), United Kingdom (-39.8 percent) and United States (-34.9 percent), plus Russia (-33.0 percent), United Arab Emirates (-33.8 percent), Spain (-36.8 percent) and Greece (-18.9 percent).
Summing up, reported the study center, none of the top-20 buyers of Italian furniture has grown in value or quantity in the 2009 January-August period. On the import side, four out of the top-5 suppliers of Italy have a minus sign: China, at number one, lost 17.1 percent in tons and 10.1 percent in value, followed by Germany (-14.6 percent in value and -5 percent in tons), Austria (-30.7 percent and -44.2 percent); the situation was more stable for Romania (-4.5 percent and -0.1 percent) and Poland (-13.7 percent and +6.9 percent).
Furniture (excluding vehicle furniture) lost 22.9 percent in export and 14.9 percent in import in the January-August period. On the export side, among the top countries, negative results were recorded by France (-10.8 percent), Germany (-10.4 percent), United Kingdom (-39.6 percent), Russia (-31 percent) and United States (-33.3 percent). For import, critical situations affected the ranking leader China (-7.8 percent), followed by Germany (-15.3 percent), Poland (+7.1 percent), Romania and Austria.
For wood (a macro industry that includes wood-based construction products and all other wood products, including semi-finished products and furniture components), the trend was even more negative, with a preliminary result of -24.3 percent in turnover and -27.9 percent in export; this drop mainly affected construction wood, but it involved all segments, including panels, crushed between the crisis of constructions and furniture.
On the export side, from January to August 2009, the top-5 countries in the ranking recorded significant drops, with Germany down by 27.7 percent, followed by France (-28.4 percent), Switzerland (-6.2 percent) the United Kingdom (-26.9 percent) and Russia (-37.6 percent). The trend was not better for the United States (-45 percent), Spain (-44.9 percent) and Greece (-42.5 percent). The imports of wood and wood-based products decreased significantly as well: according to Centro Studi Cosmit-FederlegnoArredo, the reduction amounted to 26.8 percent, a worrying evidence that Italian companies are cutting investments in raw materials and delaying re-stocking. This reduction affected the most important suppliers of Italy, such as Austria, down by 21.6 percent, Germany (-18.2 percent), France (-41.5 percent), China (-33 percent) and Croatia (-21.8 percent). A difficult situation also for major markets like the United States (-32 percent), Spain (-33.2 percent) and Russia (a heavy -52.3 percent).
Some urgent measures to reverse this trend were listed by Messina: a scrapping premium for furniture similar to cars, subsidies for enterprises through tax allowances, support of consumption and purchasing capacity of families, scrapping and renovation premium for hotels. “We need urgent measures by the Government to prevent the loss of more than 100 thousand jobs and to guarantee the survival of our small and medium enterprises, which are the backbone of the Italian economy. Scrapping premiums should be the very first measure, to support furniture as we did with cars. And directly support companies with tax allowances”. The Fla president also added: “Re-launch consumption and increase the purchasing capacity of families. Extend the scrapping premium to the Italian hotel system, which is partially inadequate and needs to be improved. These measures should boost the construction activity, re-launch the manufacturing industry, support the infrastructure system and decrease temporary lay-offs, while supporting tourism”.
