Europe continues to perform a key role in the global furniture trade and industry, but that role is shifting as European operators seek to reduce risk by shortening supply chains and with introduction of new environmental regulations. For wooden furniture, the EU Deforestation Regulation (EUDR) is likely to play a particularly significant role in future procurement practices.
In global terms Europe has lost ground to emerging markets in furniture production and consumption in recent years. However, it remains the world’s third-largest market after Asia Pacific and North America. With more than 230 million households, a relatively high level of per capita consumption, and annual retail furniture sales of EUR 165 billion, Europe accounts for over a quarter of the global world furniture market.
This is according to the latest edition of the World Furniture Magazine published by CSIL, the Italian furniture industry research organisation.
A key feature of the European furniture sector, according to CSIL, is that it is characterised by an exceptionally high level of business-to-business trade concentration and integration: as much as three quarters of cross-border furniture trade worldwide occurs between European countries where there is a robust intra-regional trade network. And unlike in the U.S. where a large share of furniture production has been relocated to China, Southeast Asia and Mexico, 80% of current demand in Europe continues to be met by European manufacturers.
As elsewhere in the world, Europe’s furniture market exhibited robust growth during the pandemic in 2021 as consumers spent heavily to improve their home environment, establish home offices, and improve outside space. Economic support measures in the immediate aftermath of the pandemic continued to fuel the boom into 2022, but the market decelerated rapidly in 2023.
According to the latest figures from CSIL, the overall value of furniture consumption in Europe contracted by 3.5% last year.
CSIL note that the European furniture sector has faced a multitude of challenges since the pandemic outbreak with disruptions along the entire value chain. Since 2023, the rising cost of living has intensified pressure on consumer spending, particularly for big-ticket items such as furniture. At the same time, major logistical challenges, volatility in transport costs, and other supply problems forced furniture manufacturers and retailers to rethink their business strategies.
Most furniture companies surveyed by CSIL in 2023 said they are actively working to shorten supply chains and increase dependence on local production to reduce risk and shorten time to market. Within Europe, Portugal, Italy, and Spain have particularly benefited from this trend.