European furniture manufacturers are also strongly motivated to maintain and increase share in their home markets as they are now struggling to expand sales outside the EU. Last year there was a 1.7% fall in the value of EU wood furniture exports to €8.78 billion.
This continues a trend of flat-lining, or slowly declining exports to countries outside the EU after reaching an all-time high of just over €9 billion in 2015. Since then the competitive benefits of the relative weakness of the euro against the dollar and other cost saving efforts of EU wood furniture manufacturers have waned.
Competition for EU-based manufacturers has intensified from newly emerging producers in Eastern European countries outside the EU, such as Bosnia, Ukraine and Turkey, and from Vietnam which in the last 5 years has rapidly overtaken all other tropical countries in the global league table of wood furniture producing nations.
EU wood furniture manufacturers have suffered in higher end export markets in Asia, the CIS and Middle East from a range of factors including cooling of the Chinese economy, a sharp fall in global equity markets towards the end of 2018, extreme weakness of the Russian rouble, relatively low oil prices and political instability.
Given domestic market problems in the EU and the European Central Bank’s policy to keep interest rates at record-lows to boost demand, the euro is expected to depreciate against the dollar in 2019, which may boost EU exports a little this year.
However, while the risk of outright global recession in 2019 still seems low, a general global deceleration is widely forecast with growth falling below potential in most regions. Overall therefore, EU wood furniture exports are unlikely to rise significantly this year.