28 April 2022
UK furniture manufacturers expect new order intake to drop significantly
Here are the main findngs of the latest BFM furniture trade report for April. The full report is avilable to BFM members:
- In October last year, furniture manufacturers were generally confident about the trading environment. That has now changed, with a negative balance of 54% stating that their business situation is worse than it was 6 months ago, although slightly better (+4%) than it was a year ago.
- While the level of output is expected to remain the same over the next 6 months, new order intake (-54%) is predicted to fall significantly. The poorer trading environment is put down by many to the rising cost of living, material and energy costs, shipping rates and the Ukraine war.
- Material price rises remain a major issue for all respondents, as does increasing labour costs (+96%) and overheads (+100%).
- Across all materials, an average rise of 18% was reported which chimes with that recorded by the Office of National Statistics for furniture manufacturers. An average of course hides variations in the rises experienced. For example, one in six respondents reported that plywood prices had doubled in the last 6 months.
- A balance of 96% reported that they had raised product prices since October; one quarter of which by 10%. Yet despite these rises, material and other costs were adversely impacting on gross profit margins with a balance of more than half reporting that they had worsened in the last 6 months. The graphs below suggests that further trade prices rises will be made in the short term.
Balance Trends sincce 2014
- A balance of 79% reported experiencing skill shortage, with 21% stating that they were significant or severe.
- A balance of -4% reported that their cash flow situation is expected to worsen in the next 6 months.
Full survey results incuding individual sector results. Members only.