Orders and output are on the rise and the costs of materials are falling, prompting a positive perspective according to national trade body, British Furniture Manufacturers (BFM).
In its most recent Trade & Price Trends Survey, BFM found that the number of respondents that were more optimistic about the general trading environment compared to six months ago had risen by 23%. That same percentage also reported that trade was better than the same time last year.
The survey, which is held twice a year in spring and autumn, maps out the key factors in the industry including employment, output, costs and exports, as well as giving a clear indication of the opportunities and challenges BFM members anticipate for the coming six months.
A key theme to emerge from the survey is an easing of material price increases. In October 2022, 86% of respondents reported raw material rises, while in April 2023, rises were reported by only 15%.
Rising overheads and labour costs had prompted 69% of respondents to increase product prices in the last six months, with the most common increase being 5%.
No redundancies were reported in the past six months, with none anticipated for the coming six months. And while pressures from skill shortages have improved, with 46% having no issues to report compared to 23% six months ago, 54% still reported moderate to severe problems in recruiting skilled labour.
BFM Chairman Nick Garratt said: “Six months ago, the furniture industry was braced for a difficult winter. Optimism surrounding the general business situation had plummeted to -64% with one in five respondents to the October survey reporting that they were either making a loss or breaking even.
“With spring has come a new optimism thanks to stabilising material prices, a rise in order intake and a 31% leap in output. More survey respondents have reported falling profit margins (15%), but this is the lowest figure for two years and 38% of respondents are expecting cash flow to improve over the next six months.”
A full version of the BFM Trade & Price Trends Survey, which features a comprehensive overview of key industry statistics, including trends in sales, materials, labour, overheads, and margins is available to BFM members via the association’s website: www.bfm.org.uk