Trade remains downbeat about business outlook for 2024

After a tough year in 2023, bed manufacturers and suppliers remain downbeat about their expectations for 2024. Only 18% of manufacturers and 20% of suppliers reported demand was better than expected in the second half of 2023; while 42% of manufacturers and 30% of suppliers said that it was worse.

The results are from the National Bed Federation’s latest State of Trade survey, for which members were asked about how their businesses fared during the second half of 2023 and their expectations for the first half of 2024.  A total of 49 companies – 39 manufacturers and 11 suppliers responded to the latest survey, giving valuable insight into the industry’s state of trade, including demand, prices, costs, margins and employment.

NBF executive director Tristine Hargreaves said: “While demand in the latter part of 2023 was marginally better than the first half – not least because autumn is usually the highest performing time of the year for sales – it remains subdued, leaving both manufacturers and suppliers disappointed that there is still no sign of improvement.”

The outlook is also considerably weaker than six months ago, particularly for manufacturers, with only 11% feeling optimistic, versus 46% feeling pessimistic. Suppliers are feeling a little more upbeat, with 20% feeling optimistic versus 40% pessimistic.

With demand so subdued, it’s perhaps not surprising to see that lead times have receded as an issue – better than expected for 32% of manufacturers and 20% of suppliers. Short of any further supply chain disruptions, the vast majority expect no changes to their current lead times in the coming months.

While there was no change across most costs for around 40% of manufacturers, there were more companies seeing prices rise than fall, with the exception of foam – where 38% said costs were down and 27% that they had increased. Energy saw the highest differential with 48% citing increased costs and only 10% decreases. Costs also rose for suppliers in the period and, looking ahead, both manufacturers and suppliers are anticipating further rises – for suppliers, particularly for freight costs on the back of problems for shipping via the Red Sea.

Some manufacturers and suppliers have been able to offset rising costs with price increases or achieved both cost cuts and price increases to improve margins. 30% of manufacturers and 40% of suppliers saw margins improve. Others however have not and there remains a significant minority – more than had hoped back in the summer of 2023 – whose profit margins are being squeezed.

Reduction in headcount, redundancies and short time continued in the second half of 2023 but at a slower rate than in the first half. The slight improvement in second-half sales led to fewer manufacturers than anticipated cutting back – 27% vs 40%. 24% increased their headcount. During the first half of 2024, 27% anticipate taking on more staff while only 16% anticipate cuts. Suppliers did even better – with 50% taking on more staff and 40% predicting increases this year. Wage rises averaged at around 6% for both shopfloor and office staff.

There is also a healthy interest in exporting with almost half already doing so and over a quarter looking at expanding their efforts in this area.

Save this article for later

You can revisit this article if you save it as favourite news!

Leave a Comment

MORE ARTICLES

Romilly Newbound, Company Director at Back in Action, talks about the importance of health and ergonomic products as well as concerns over high street retail....