GERMANY - Sales in the German furniture industry are forecasted to decline by 4.3 percent in 2023, reaching approximately EUR 18 billion, as per official data.

This decrease affected both domestic sales, which dropped by 4.6 percent, and foreign business, experiencing a 3.6 percent decline. The export rate stood at 33.4 percent. Jan Kurth, managing director of the German furniture industry associations, attributes this downturn to factors like consumer hesitancy, driven by inflation, construction sector setbacks, and geopolitical uncertainties.

While the first half of the year saw sales dip by a marginal 0.2 percent due to various factors including order backlogs and pricing dynamics, the latter half witnessed a steep 8.4 percent decline. Kurth notes that incoming orders collected by the association throughout 2023 were, on average, around 11 percent lower than the previous year, reflecting the market's weakened state. Notably, the "other furniture" segment, encompassing living room, dining room, and bedroom furniture, experienced the most significant losses, with sales plummeting by 12.6 percent to EUR 5.6 billion compared to the previous year.

In December 2023, German furniture manufacturers reported a sales drop of 9.4 percent compared to the previous year, totaling EUR 1.25 billion. Despite a slight uptick in office furniture and other contract furniture, all other sectors experienced declines. Looking ahead, Kurth remains cautiously optimistic amidst ongoing challenges in the market environment, highlighting concerns about sluggish residential construction and calling for political support. However, he finds some solace in the anticipated decline in inflation and expected interest rate cuts by the European Central Bank in the latter half of the year.