World Furniture - International Market Review #63 September 2014

1. SPECIAL REPORT
STUDIES
by Mauro Spinelli
THE EUROPEAN MARKET
FOR OFFICE FURNITURE
CSIL International Market Research
WORKSPACE
he persistence of the market tur-bulence
has somewhat upset the
general conviction about the
duration of the economic cycle. In
T
fact, before 2008 the office business in
Europe registered two main critical peri-ods,
one in 1993 and another in 2002,
while since the dramatic drop of 2009
the sector remained stagnant and
slowed down again in 2013. In this diffi-cult
situation, companies are of course
obliged to prepare their mid-term budg-et
plans, but at the same time they are
forced to adjust them on a “quarter by
quarter” basis, because the trend of
sales inevitably reflects on their invest-ment
policy in machinery, R&D and
marketing-distribution.
In 2013 European office furniture pro-duction
reduced by 5.6% to a value of
EUR 6,735 million. The performance of
international trade has been negative.
The -0.8% decrease in exports (EUR
2,358 million) was accompanied by a
reduction of imports (-5.8%, EUR 2,172
million). As a result, apparent consump-tion
decreased by -7.3% over the year.
Market openness increased in 2013 as
exports/production ratio grew to 35%
gaining two percentage points compar-ing
to the previous year and
imports/consumption ratio stabilized at
33% for both years.
The market difficulties registered in the
year gave new reasons for industrial
restructuring process with a number of
companies downsizing employment,
entering insolvency procedures and
EUROPEAN EXPORTS OF OFFICE FURNITURE, 1993-2013. PERCENTAGE CHANGES
Source: CSIL processing
operating factory closures. Starting
from September 2013 a lot of plants
closures have been announced in
Germany by the most important manu-facturers
in the office furniture sector.
The number of workers continued to
decrease falling by 1.9% on average
compared to 2012, and it is expected to
drop again in the current year.
CONCENTRATION, COST REDUC-TION
AND INVESTMENTS
The market concentration in Europe
continued to increase over the last
years with top 5 manufacturers current-ly
covering about 21% share of the
whole market. Kinnarps is the largest
player in terms of turnover, followed by
Steelcase with a market share of 6.5%
and 6.4%, respectively. Ahrend Group
ranked third (gaining one position com-pared
to 2012), followed by Haworth
Europe and Bene Group which is
undergoing a business reorganization.
The European office furniture sector
employed a total workforce of about
55,434 in 2013. The trend has been
negative since 2008, recording a fall in
2009 and further decreases in the fol-lowing
years. The majority of players
now employ less people than in the past
with some manufacturers losing until
60% of their employees in five years.
The Italian Faram and Mio Dino have
been placed in administration in May
2014, the two factories have been
closed, resulting in a loss of 180 jobs.
At the end of 2013 three Italian compa-nies
have been put in liquidation:
Castelli Spa, Iterby and Della Rovere.
Several plant closures and conversions
have been announced in Germany. The
majority of them will be operated during
2014. Kinnarps, Haworth, Steelcase
and Koenig+Neurath announced both
factory closures and workforce reduc-tion
in the current year.
Kinnarps plans to cut its workforce by
50 positions out of 422 in its main pro-duction
facility in Sweden in 2014.
Already in 2013, the gorup had started
a program to reduce costs and improve
www.worldfurnitureonline.com September 2014 - WF 13

2. SPECIAL REPORT
STUDIES
WORKSPACE
EUROPE. OFFICE FURNITURE PRODUCTION, NON-RESIDENTIAL CONSTRUCTION
OUTPUT AND GDP, 2003-2013 AND FORECASTS FOR 2014.
PERCENTAGE CHANGES AT CONSTANT PRICES
THE EUROPEAN MARKET
FOR OFFICE FURNITURE
This report offers a comprehensive
picture of the office furniture market in
16 Western European countries,
providing office furniture industry
statistics (production and consumption,
imports exports), office furniture prices,
marketing policies and distribution,
market evolution (2003-2013) and
figures by country.
A forecast on office furniture
consumption by country in 2014 and
2015 is also given.
The report analyses sales data and
market shares of top European
manufacturers.
The 2014 edition contains a detailed
analysis on office seating quantities
and brand positioning. The number
and the performance of swivel chairs
sold in 2012 and 2013 and brand
positioning by average “net price”, is
given for six major countries (Germany,
France, United Kingdom, Italy, Spain
and Sweden). Values include both
products manufactured in Europe and
products imported from extra
European countries.
Publisher: CSIL, Publication date: June
2014, XXVI Edition, Language: English
Available for online purchase and
immediate download at
www.worldfurnitureonline.com
Source: CSIL processing of official data
* forecast
synergy in production, in line with the
worse-than-expected sales develop-ment.
In Summer 2013 Martela announced a
restructuring program aimed to achieve
cost savings equivalent to annual EUR 6
million by the end of 2014. The princi-pal
measures include production trans-fers
among the Group’s different busi-ness
locations and merging of support
functions as well as reorganising and
improving the productivity of poorly per-forming
businesses. The personnel
reductions and production transfers
represent approximately 60% of the
total cost saving plan.
König+Neurath is in the process of
closing its manufacturing facility in
Weissensee/Thuringia, Germany (130
employees), and to consolidate its pro-duction
at its Karben headquarters in
Germany.
In parallel with cost reduction policies
operated by companies (especially in
terms of workforce), the percentage of
total turnover destined for investments
started to increase again over the last
years. On average European office fur-niture
manufacturers dedicated 4.8% of
turnover to investment activities.
Promotion represented 1.0% of total
turnover in 2013 and it has been
decreasing since 2003.
Investments in machinery stabilised at
1.5% of total sales.
Companies continued to invest in
design and product development,
which remained almost stable at 2.3%
of total turnover.
EXPECTATIONS FOR 2014
Europe expects a moderate GDP real
grow in 2014 (+1.2) and a slow
decrease (-0.4%) of non-residential
construction output. According to the
last available figures from Eurostat the
office furniture business started 2014
with a slow increase of export activities,
in particular +0.7% export growth in
January-February 2014 (compared to
the same period of 2013).
Regarding the European office furniture
output at constant prices, CSIL is fore-casting
for 2014 an increase of 1% on
the previous year.
WHICH PROSPECTS FOR EU COUN-TRIES?
In 2014 largest GDP increases are
expected for Sweden, United Kingdom,
Norway, Switzerland and Germany,
while Greece, Italy and Finland will
increase slowly together at a rate lower
than 1%. A general stagnation is pre-dicted
for the remaining countries.
For 2015 a better outlook is expected
for Sweden, Ireland and Greece (real
GDP growth about 3%), followed by the
United Kingdom, Norway, Spain and
Germany, which will record increases
between 2.5% and 3%.
14 WF - September 2014 www.worldfurnitureonline.com

3. WORLD FURNITURE - International Market Review
About Us
World Furniture – International Market Review is a quarterly
review of economic information and market analysis. This magazine
offers contributions on international furniture and furnishing
markets, demand and supply, retail and consumption, business
trade country profiles trade, profiles, competitive systems, international events,
fairs and exhibitions.
Print issue is mailed to a selected target of 2000 manufacturers and
suppliers in the world's main producing, exporting and consuming
countries. World Furniture is also circulated at major international
sector fairs.
World Furniture – International Market Review is published by
CSIL, Centre for Industrial Study, an independent research and
consulting company specialized in applied economic research,
EDITORIAL
PROGRAMME 2015
World Furniture
No. 65/March 2015
World Furniture
No. 66/June 2015
evaluation of public investment projects, infrastructure project
appraisal, support to development programs and policies, market
analysis and SMEs economics founded in Milan (Italy) in 1980.
World Furniture
No. 67/September 2015
World Furniture
No. 68/December 2015
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