BRAZIL – In the first half of 2014, the performance in domestic and foreign markets of the furniture cluster of Bento Gonçalves was below expectations.

he main challenge for the remainder of the year is to find alternatives for the consumer slowdown in Brazil and the loss of share in major markets in Africa and South America.  

This decline is being experienced since 2013 and one of the main reasons for the result is the reduced competitiveness of the industry. As exports of the cluster suffered a fall of 2.7% in the first half, Henrique Tecchio, President of Sindmóveis, considers that the industry has felt the effects of rising costs, logistical problems and a high tax burden, causing difficulties for the cluster to compete internationally. "To reverse this scenario, we are reinforcing the action of the International Committee in search for alternative markets for Bento Gonçalves furniture, based on quantitative criteria and market information of Apex-Brasil, combined with the experience and market insight of the main exporters", Tecchio said. 

Regarding the domestic market, which absorbs nearly 95% of total production, the situation is also cautious. From January to May, the nominal revenue fell 3.9% over the same period of 2013. According to the Brazilian Institute of Geography and Statistics, IBGE, the volume of retail sales in Brazil is also slowing and, despite being still positive, the industry’s domestic production is not accompanying this evolution. The furniture manufacturing sector had one of the worst performances among all industries surveyed by the IBGE (down 7.6% so far in January to May), which can be explained by the accumulation of unwanted stocks and growth of furniture imports.