The road for 2024 and beyond: crafting a sustainable future for the European furniture sector

The furniture sector across Europe is still facing some tough challenges as manufacturing companies are forced to navigate a barrage of fluctuating economic and geopolitical issues. Inflation, recession, the wars, latest shipping challenges in the Red Sea, increased energy prices, and rising interest rates are just some of the headlines.

In my view, fluctuation, or fast-changing circumstances, as a result of these issues is the overarching problem that the furniture sector continues to face right now. It results in some effects including increased material prices, cost of importing, export tariffs, supply chain issues, shipping costs, overall price increases for the consumer, and reduced consumption.

We can navigate through these uncertain times looking forward if we focus on some core values, including, but not limited to innovation; investment in skills, design and new technologies; and a focus on sustainability.

The Landscape Past, Present & Future

The European furniture sector is a diverse and dynamic market. It comprises large global furniture manufacturers such as IKES, Steinhoff and JYSK; alongside a wealth of innovative SMEs. Earlier this year, Statista quoted the number of manufacturing Enterprises in the EU at more than 128,000. The EU itself states that the furniture industry in Europe employs in the region of 1 million people and is valued at more than €96 billion per year.

The last 15 years have seen plenty of ups, and more recently, downs. The decade before the global pandemic witnessed steady growth for the industry, while 2020-2021 brought a further, unexpected upturn for furniture manufacturers through the pandemic years. 2022 and 2023 to date, however, have seen a sharp downturn as the industry faces an array of challenges. The latest IKEA sales forecast shows a further decline for the upcoming year as well. Even the furniture market demonstrated some light at the end of the tunnel, the beginning of 2024 doesn’t look promising. As warmer seasons tend to show a decline in furniture sales, we may witness some changes moving towards Q3.

The lingering effects of the energy crisis, material price increases, consumers not spending amidst rising mortgage/rent costs and an uncertain financial outlook meaning a decrease in demand, continuing supply chain disruption, and skilled labour shortages are all taking their toll.?

But we can mitigate these challenges if we don’t panic; look to the future and focus on creative solutions in the present. What we can do now?

Focus on sustainability?

Meaningful sustainability is vital. To make the world a better place, whatever size of the enterprise, we can look to invest in sustainable business models AND sustainable products that are high quality, made from materials that are responsibly sourced and built to last. Moreover, furniture manufacturers must also consider investing in a more circular economy, where products can be easily up-cycled or re-cycled at the end of their life. According to the European Environmental Agency, adopting circular economy principles in the furniture sector could lead to a 50% reduction in carbon emissions and a 32% reduction in material consumption.

Work with sustainable-focused partners

Forging alliances with sustainability-focused partners is of a paramount importance. Whether they focus on innovative adhesive solutions, alternative fuels, or sustainable materials and certification, such collaborative partnerships drives the sustainable transformation in the furniture industry.?

More localized manufacturing

A more localized approach to manufacturing across the furniture sector can support a sustainable and resilient future. Localized manufacturing contributes to reducing the carbon emissions associated with long-distance shipping and also promotes the growth of regional economies.?

Production on demand

This production strategy involves manufacturing products in response to specific customer orders rather than producing goods in large quantities in advance. This approach minimizes inventory costs and waste, as goods are only produced when there is a confirmed demand and also streamlines the supply chain, reduces storage costs, and enhances overall efficiency while ensuring that products are available precisely when customers want them.?

Innovative technologies

Adopting digital and advanced manufacturing technologies can support this approach. 3D modeling, virtual reality, and augmented reality are all increasing the customization and visualization of furniture designs. Similarly, automated production systems have also been shown to improve efficiency and reduce lead times.

Across the furniture sector in Europe, we have to keep talking, keep sharing and keep working together. While we have to operate in the present, our actions must be measured. History shows us that after every downturn, there comes an upturn.