From world Gdp to the furniture sector, Csil provides us with a snapshot of what happened in 2020 and what may happen in 2021, between crises and rebounds.
In 2020, the world economy experienced a shock due to the outbreak of the “Covid-19” pandemic. The health emergency and the related containment measures have generated a global recession – which has no historical precedent in terms of breadth and spread – and recovery scenarios are very uncertain. A reduction in real terms of world Gdp of 4.4 percent as a result of heterogeneous trends between countries: emerging markets should experience a less negative performance than that of advanced countries. Among high-income economies, it is estimated that, in general, the overall effect of the pandemic in the United States was less than in Europe, despite the considerable number of infections.
The fiscal and monetary stimulus (higher than that activated during the 2008 crisis) strongly supported demand, which also saw a reorganization of household spending (passing from entertainment, tourism and transport, to other sectors such as technological products and for the house). In Europe, the pandemic had different economic impacts in different countries, and recovery prospects also vary considerably depending on the degree of spread of the virus, the rigor of public health measures adopted to contain it, the sectoral composition of national economies and the intensity of national policy responses. China, thanks to the growth of industry, will be the only major economies to close the year with a positive sign, albeit at a much lower rate than “pre-Covid” expectations. At the other extreme, the economic outlook has deteriorated considerably in India, which is still busy trying to keep the pandemic under control and will therefore experience one of the worst recessions. In many other emerging markets too, the outlook continues to remain precarious. For the world trade in manufactured goods, which had already shown signs of a slowdown in 2019 due to trade tensions, a year-end is expected with a decline of more than 8 percent.
The global scenario will show a rebound in 2021 and growth will continue in the following two years. Growth will therefore be generalized to all major economies from the Us to China to the countries of the European Union, but such scenarios are subject to an exceptionally high degree of uncertainty. The pandemic may also prove to be an accelerator of return delocalization processes, helping to progressively increase the role of the internal market in the various countries and in the macro-areas of proximity. Various risk factors still remain, not only closely linked to the evolution of the pandemic and progress in vaccines and treatments but also to the resilience of economic systems and to other factors of geo-economic uncertainty (e.g. US-China tensions, Brexit … ).
Last year has been a challenging year for the furniture sector, hit by the pandemic both on the demand and supply side. The lockdown policies and their length varied across countries, segments of production and retail activities.
World furniture consumption is estimated to decrease by 10 percent in 2020 (in current Us dollars). For the first time, all regions are projected to experience negative growth in 2020, with differences across countries, reflecting different economic structure (dependence on severely affected sectors, on external financial flows and pre-crisis performances) and containment reactions facing the pandemic evolution.
Some trends that were already present across the sector have been accelerating during the year, impacting companies’ strategies. On the consumption side, the role of the online channel increased at unprecedented growth rates, with also leading manufacturers entering the market directly.
On the production side, supplied products (e.g. great changes in the office spaces, rising in the home office segment, multi-functionality, antibacterial surfaces, increasing attention of consumers wellbeing etc.) are evolving. They could represent growth potential for the future.
The main furniture producer is China, with 41 percent of world furniture production. Other major furniture manufacturing countries are the United States, Germany and Italy. From 2011 to 2020 furniture production share of Asia and Pacific increased by about 11 percentage points. As a consequence, in 2020, more than half of world furniture production took place in Asia and the Pacific.
The leading importers of furniture are the United States, Germany, France, the United Kingdom, and Japan.
Until 2018 the increase in imports in the US was the main engine of growth in international trade of furniture. The decrease in Us furniture imports in 2019 was mainly due to trade restrictions. Because of trade tensions between the Us and China, within the total Us furniture imports from Asia, the share of China decreased in favour, in particular, of imports from Vietnam. Preliminary data for 2020 show substantial decreases in furniture imports for all major countries.
The main furniture exporting country is China, followed at a distance by Vietnam, Poland, Germany and Italy.
In the last ten years, the international trade of furniture has consistently amounted to about one percent of international trade of manufactures. After the major contraction in 2020, growth will resume in 2021 and the pre-crisis level, in current Us dollars, is expected to be attained in 2022.
According to the International Monetary Fund, the decrease of World Gdp – as we said – due to the pandemic in 2020 can be estimated at 4.4 percent, with a more severe contraction in advanced economies than in developing countries. Growth is expected to resume in 2021 and 2022, but uncertainties regarding the evolution of the pandemic remain high, and downside risks remain significant
For the year 2021 growth of furniture consumption above the depressed levels of 2020 is expected worldwide.
Among large markets (over Us dollars five billion of furniture consumption) the countries expected to have a greater rebound in furniture consumption growth are China and India.