It was a great pleasure for us to attend the traditional event where Csil present theiir 2018 outlook. This year, the crystal ball that Csil looks into every twelve months celebrated its thirtieth anniversary.
Let’s get down to the facts and figures reported last November 24, 2017, at the Confcommercio Milan offices, when Csil-Centro studi industria leggera presented the 2017 editions of their two reports: World Furniture Outlook 2018 and Rapporto di previsione sul settore del mobile in Italia, 2018-2020. The audience was numerous as usual, approximately two-hundred people.
The World Furniture Outlook 2018 is a valuable source of analytical data on the furniture industry and forecasts on the 2018-2019 furniture demand growth in 100 countries, including 40 European countries, 21 in Asia Pacific, 21 in the Middle East and Africa, 3 in North America and 15 in South America.
The Rapporto di previsione sul settore del mobile in Italia (Italian Furniture Industry Outlook), instead, offers an updated and detailed picture of perspectives for the Italian furniture industry and market. Plenty of figures, from preliminary 2017 balance to 2020 forecasts for production, export, domestic consumption and import. Besides forecasts, the report includes a dedicated section about “omnichannel” and distribution strategies deployed by industry companies in the Italian and international markets. The macro economic scenarios that provide the background to the reports were processed by Prometeia, within their longstanding collaboration with Csil, and by the International Monetary Fund; such information traditionally opens the November event, presented by Stefania Tomasini (Prometeia). The global market outlook was illustrated by Sara Colautti of Csil, during a session chaired by Massimo Florio. The Csil event is delivered by a team constantly committed to the production of these and more reports created by Csil every year, with the valuable support of companies and organizations that collaborate with the study center, the furniture trade association Federmobili and the sponsors who supported the seminar: Biesse, Feneal-UIL, Filca-CISL, Fillea-CGIL, Fulgor Milano, Ivm Chemicals.
The afternoon session closed with the traditional roundtable discussion, which is dedicated to a hot topic for the industry. This year, the topic of the debate was “Omnichannel strategies on global markets. The approach of furniture companies”.
The Csil outlook fits into an international scenario based on specific considerations. First of all, in 2017 the global economic cycle strengthened and global gross domestic product increased by 3.5 percent, driven by a livelier trend of industrialized economies (Emu especially) and emerging countries compared to the previous year. In the three-year period under scrutiny, such trend will continue, with the emerging countries achieving growth rates above 4 percent, while the industrialized countries will remain below an average of 2 percent.
The macroeconomic conditions are improving in Brazil, but the situation is still critical. In Russia there are positive signals. Cina, after exceeding the government’s growth expectations in 2017, should now see a “controlled slowdown” (from plus 6.3 percent in 2018 to plus 5.5 percent in 2020). In India, in the same three-year period, Gdp will be rising again at rates above 7 percent.
Among high-income economies, the United States will continue their growth trend, while Emu countries experiencing a consolidation of recovery in 2017 (plus 2.2 percent of Gdp in real terms) will achieve further growth, with still positive while falling rates. The global trade of manufactured goods in 2017 was rejuvenated: according to estimates, last year closed with 5 percent growth in real terms. In 2018 growth will remain above 4 percent, while in the remaining period growth rates will fall slightly below this threshold, also as a result of slower expansion in China and in the United States in 2020.
Looking at currency exchange rates, the euro will appreciate against the dollar, generating pressure on domestic prices and possible effects also on European export, while raw material prices, after the rally in 2017, are expected to achieve another minor increase. For Italy the figures of Q3 2017 confirmed that economic recovery is solid, with an annual Gdp growth rate of 1.5 percent. Forecasts indicate a continuation of the growth trend also in the coming years, supported by domestic demand. Italian economy is expected to grow by 1.2 percent in 2018 and 0.9 percent in 2019.
Risk factors: this economic picture is exposed to several economic and political risk factors; on the economic side, uncertainty endures for the consequences of Brexit, US policies for protectionism and the size of the corrective financial measures that the European Union will request to Italy. On the political side, Italian elections, the lack of a majority cabinet in Germany with possible new elections, tension with North Korea, presidential elections in Russia and tension in the Middle East are further elements that might change the scenario.
Global furniture consumption at production prices (distribution markup excluded) is currently equal to some 425 billion US dollars. The market opening rate (i.e. the ratio between import and consumption) is currently at 30 percent. The main international furniture importers are the United States, Germany, the United Kingdom and France. Export from Cina, the world’s leading exporter, had more than doubled between 2009 and 2015, now it is worth 50 dollar a year approximately; Chinese export has increased also in recent years, though at moderate rates. The other big furniture exporters (including Germany, Italy and Poland) kept growing in 2017. In 2018 global furniture consumption will increase by approximately 3.5 percent in real terms, but the uncertain international situation implies several risks. The regions that are expected to grow faster are Asia and the Pacific. 2018 forecasts for furniture foreign trade indicate 4 percent growth at current dollar rates for the value of international trade.
The year 2018 will still see moderate growth for this industry, with potential international demand slightly improving to support Italian export; on the domestic market, some drivers will still have a positive impact on consumption, but not enough to achieve higher growth than in 2017.
On the international markets, the expected appreciation of the euro against the dollar will not affect the trend of furniture sales, that will be supported by demand from European Union countries and the United States, with positive signals also from Russian and Chinese demand. So, in 2018 an export growth by just below 3 percent at constant prices is expected.
Digital transformation is disrupting the competitive environment for industry companies. In detail, purchasing processes are changing (customer journey) and the interaction between online and offline activities (including communications and purchase/sale) is increasing, just like the use of multiple channels by customers who are increasingly keen on shopping time, involving experiences and profitability
Producers and distributors are encouraged to use multiple channels. To avoid cannibalization, each channel is initially isolated and managed separately, but ultimately a totally different approach prevails to offer a seamless customer journey, an experience based on a customer-centric strategy.
The panel of operators who attended the seminar presented different facets of this topic, illustrating the new scenarios of Digital innovation and the approach and strategic management of omnichannel activities, which allow to interact with the market and traditional channels in an integrated and consistent way, in line with new relationship management and purchasing concepts.