GERMANY – The managing director of the Association of the German Furniture Industry (VDM), Jan Kurth, explains the effects of the corona virus on the German-Chinese furniture trade:

“The German furniture exports to China already showed clear signs of braking last year. In 2019, exports fell by 16.5% to € 281 million. However, this decrease was less due to the corona virus, but primarily due to the slowdown in economic growth in China and the introduction of higher furniture import duties in the United States. The oversupply of furniture from Chinese production had a negative impact on the demand for German and European furniture in China, but at the same time stimulated Chinese furniture exports to Europe. Accordingly, German furniture imports from China rose by 12.9% to € 2.15 billion last year. The German foreign trade deficit in furniture trade with China thus rose to € 1.87 billion.”

Kurth went further, “Even though there are currently no official foreign trade figures for the current year, against the background of the already visible negative effects of the coronavirus on furniture demand in China and on the global supply chains, we assume a significant decline in German furniture foreign trade volume with China in the first quarter of 2020. Not only will German furniture exports be affected, but also imports of furniture, primary products and supplier parts. The VDM conducted a member survey at the end of February on the effects of the corona crisis on the German furniture industry. According to the first results, almost half of the companies surveyed (49%) are currently unable to deliver the goods already ordered to China. More than half of the respondents (58%) are currently seeing a decline in orders from China. On the import side, more than half of the companies (56%) state that they are affected by supply shortages from China. In addition to a – at least temporary – significant decline in German furniture exports to China, the current situation should also lead to a change in imports. If, due to the hesitant start of furniture production in China, promotional goods for the German retail trade fail, or can at least be delivered with a significant delay, large areas and discounts in particular have to be covered elsewhere. Whether this happens due to the pricing of the goods concerned in Germany or is spread across other European or international countries of origin also depends on the response speed and delivery reliability of the alternative suppliers. One thing is certain: 2020 will be another particularly challenging one for the furniture industry.”