China’s furniture industry still appears to be on the rise

Tag : china Furniture

Import growth to the United States slowed in 2007 thanks largely tothe stagnant American economy combined with rising prices onfinished goods. Some Chinese manufacturers also faced damage due toheavy snowstorms this past winter. The end result, some sourcesclaim, was the closing of some 2,000 furniture plants onChina’s east coast shortly after the Chinese New Year inFebruary.
That’s a small number compared with the estimated 15,000furniture manufacturers in China, but significant nonetheless interms of the potential impact on U.S. customers.
Yet based on visitor attendance and the number of exhibitors attrade shows in both southern China and Shanghai this year,you’d never know there was any slowdown in the Chinesefurniture industry. Nor would you know it by the impressive galaevents officials put on at these shows.
Grand opening ceremonies and gala dinners are sights to behold.Opening day speeches often end in a ribbon cuttings and bursts ofconfetti. Traditional Chinese dancers and musicians perform, andelaborate awards are presented to furniture designers.
It makes one wonder if this was what things were like in NorthCarolina during its manufacturing heyday a few decades back.Obviously that time is long past. This was recently highlighted bya 17% drop in orders to U.S. furniture factories from July 2007 toJuly 2008, the worst performance in a year, according to accountingand consulting firm Smith Leonard.
Meanwhile, despite this year’s difficulties, China’sfurniture industry still appears to be on the rise. According toofficials with the China National Furniture Assn., which celebratedits 20 th anniversary in September, China furniture industry exports rose28% during the first half of 2008.
That’s in spite of a recent 10%-15% increase in raw materialscosts, said association president Jia Qingwen at a meeting withtrade press during the Shanghai show.
“Because of the situation, some companies are bankrupt orhave stopped production,” he told reporters. “But manystill have healthy production.”
The U.S. remains a top export market, but even when it falters,there is still plenty of business from countries like Germany,France, England, Holland, Spain and Japan, not to mention wealthyMiddle Eastern markets such as Dubai.
“Despite the increases in labor and raw materials, theChinese furniture industry is very strong in competitiveness andquality,” added Wang Mingliang, founder of the annual ChinaInternational Furniture Expo in Shanghai. “The value isthere.”
More importantly, the demand from the domestic market in Chinaremains strong and appears to be getting stronger. Furnitureimports to China rose 33% during the first half of 2008, accordingto a statement citing the results of the Shanghai show.
“Within a few years, China will become the fastest growingconsumer market in the world for furniture,” the report said.“With more than 10 million new wealthy people living inChina, it is further expected that up-market (higher-end) furnituresales will continue to show strong market growth.”
“The middle class people (in China) have had nothing, but nowall of a sudden, they have a lot,” noted one U.S. observerwho attended the Shanghai show.
This is further evidenced by all the cars on the roads and theexpensive new houses going up in and around Shanghai. The messageis clear: While the U.S. economy is in a state of upheaval, theChinese economy remains strong.
In the Chinese furniture industry, the weak companies may begetting weeded out, but the strong ones are getting stronger bytaking advantage of the boom. Hence, for those of us who continueto visit furniture shows in China, we’ll likely continue towitness such grand scale gala events for some time to come.
Did you attend any of the China shows this year? If you did —or even if you just watched them from afar — we’d liketo hear your comments.