The variations reported by Istat in revenue (-14.9%) and production (-13.9%) in the wood sector, as well as revenue (-0.1%) and production (-5.4%) in furniture in the first half of 2023 compared to the same period in 2022, are clear signs of the wood-furniture sector navigating through uncertainty and dealing with an evolving situation that is expected to persist throughout 2023 and possibly beyond.
It is evident that the decrease in demand for furniture has corresponded to a decline in wood production as well. Wood revenues have increased significantly in the past two years due to rising raw material and energy costs. Therefore, the decrease in revenue can partly be attributed to the positive recovery in commodity prices.
Comparison between June '22 and June '23 Even when comparing June '22 and June '23, it is apparent that wood is experiencing a more significant decline in terms of revenue (-17.1%), coupled with a very negative production figure of -13.9%. Furniture revenue shows a -0.8% decline, while production is down by -5.1%.
"If the significant decline in wood revenue can be partially attributed to the slowing growth of raw material and energy costs, in contrast to 2022 compared to 2021, the data on furniture production is different, primarily indicating a slowdown in demand and the export of our products, even overseas. Clearly, these two factors also impact the wood sector, which is beginning to feel the effects of reduced production once the 2022 demand, a year with above-average performance, has been met," explains Claudio Feltrin, President of FederlegnoArredo.
Data from the FederlegnoArredo Study Center This uncertain situation is confirmed by data from the Monitor compiled by the FederlegnoArredo Study Center, based on a representative sample of companies in the sector, accounting for 18% of the total turnover, approximately 10 billion out of 56.5 billion. In the first half of 2023, compared to the same period in '22, the wood-furniture sector records an overall contraction of 5.9%, with a negative trend both for the Italian market (-6.8%) and exports (-4.5%).
The wood macrosystem is the most significant contributor to the overall decline, contracting by -12.6% (with national sales down by -14% and exports down by -8.3%), despite widely varying trends among different segments, from panels experiencing significant contraction to wooden coverings, structures, and buildings showing growth.
Furniture The furniture macrosystem, representing 62% of total sales, closes the first six months of 2023 more or less in line with the same period in '22 (-1.1%). The overall trend is primarily influenced by reduced exports (-3.3%), which account for more than half of the total, offsetting the moderately positive effect of the domestic market (+1.3%).
Negative year-end closure Looking ahead to the end of 2023, the assessment predicts a negative year-end for our sector at -3.3%, with exports at -2.6% and the domestic market at -3.8%. Regarding the furniture macrosystem, forecasts suggest a slightly positive overall trend (+0.2%) thanks to stronger domestic market performance (+1.3%) compared to exports (-0.7%). Conversely, the wood macrosystem is expected to experience a negative trend (-8.5% overall) with little difference between the domestic market (-8.6%) and exports (-8.3%).
39% of companies are reducing investments
"It's not surprising, therefore, that according to our Monitor, 39% of wood-furniture companies are slowing down their investments due to the uncertain situation, compounded by the difficulty in securing affordable financial resources, driven by rising interest rates and the decline in bank loans to businesses, which is at its lowest point in over 20 years. In the first half of 2023," Feltrin explains, "85% of companies report increased costs, with 21% experiencing an increase of over 20% compared to the same period in 2022, indicating an ongoing and worsening trend. Approximately 22% of companies are beginning to encounter greater difficulties in accessing credit, and to overcome the liquidity shortage, they are attempting to seek new loans from other institutions. 25% are considering reducing loans and supporting growth with alternative resources, possibly from partners. Our companies," Feltrin concludes, "are ready to meet this challenge by implementing strategies to actively mitigate the consequences, but it is crucial to anticipate measures to support investments to safeguard the competitiveness of the entire sector."