Consumers have shrugged off terrorism and rising unemployment to keep on shopping – especially for household-related goods, including furniture. But although British furniture manufacturing is making progress in export markets, official figures reveal that at home it continues to lose out to overseas suppliers.

Consumer spending on furniture and furnishings grew in volume at a seasonally adjusted annual rate of 6.6% in the third quarter of 2001 – up from 4.7% in the second quarter, and 0.7% in the first. This compares with growth in total household spending of 4.5% in the year to the third quarter. National Statistics says that in value terms, sales of domestic furniture in the third quarter rose by 8.7% year-on-year, following a 7% rise the previous quarter. The value of household spending as a whole was up 6% on the year to the third quarter of 2001.

Official retail sales figures reveal annual increases in the value of furniture purchases of 11% and 8% respectively in October and November 2001. The CBI survey for December points to expanding demand, with 35% of furniture and carpet retailers reporting annual growth in sales volumes. However, this compares with over 50% reporting year-on-year increases in January and February last year, albeit only 11% achieved increased volumes in the year to December 2000.

A poll by the British Retail Consortium confirms that December was a bumper month for furniture.

The buoyancy of demand was achieved despite an increase of 5.2% in the average retail price of furniture during December. This took the annual rise in prices to 2.3%, compared with inflation of 0.7%, and suggests that retailers are attempting to re-build margins.

British factory gate prices for bedroom, dining and living room furniture have not changed since August 2001, when they fell 0.6% on the previous three months: prices are now the same as in December 2000. Manufacturers’ prices of kitchen furniture also held steady through the fourth quarter of last year, and are 0.5% lower than a year before. Prices of wooden-framed seats are down 1%.

Factory gate prices of wooden office furniture increased at an annual rate of 1.7% in December, compared with a 2% rise for metal office furniture. Wooden shop furniture was 3.1% more expensive.

The condition of British furniture manufacturing presented by the latest CBI survey is less gloomy than manufacturing overall, although the outlook for exports is relatively weak. On the general business situation, the number of optimists all but outweighs the number of pessimists.

Some 22% of respondents expect output volumes to rise overall during the coming four months, but two-thirds say export order books are thinner than normal. Some 37% predict an increase in domestic deliveries, while only 17% expect to raise overseas shipments. Half of all furniture makers said that prices are the main obstacle to export sales, and no increases to overseas customers are forecast for the coming months.

In the first half of 2001 the value of shipments of wooden furniture to EU countries totalled £82.3m, up 12% on 2000. Sales of kitchen furniture improved by 40%, bedroom furniture by 8%, and office furniture by 25%. Deliveries of other wooden furniture rose 2%.

However, imports of wooden furniture from EU manufacturers rose 24% between the first halves of 2000 and 2001, to £182.4m. The value of kitchen furniture imports grew by 16%, bedroom furniture by 15%, while office furniture rose 38%. Imports of other wooden furniture from the EU increased 25%.

UK exports of wooden furniture to non-EU buyers rose in value by 2% between the first nine months of both 2001 and 2000, to £153.7m, but imports grew 10% between the same two periods, to £387.1m.
Related Files
Retail Prices
Retail Sales
UK Manufacturers’ Prices