Raw material prices drop as trading conditions worsen, reports BFM
The BFM (British Furniture Manufacturers Trade Association) has released its analysis of the State of Trade for the British furniture industry, which is available in full to members online.
The report has found that there is a less-than optimistic view on business and sales compared to last year.
With the current state of uncertainty in the UK, it may not be a surprise that views are pessimistic while the public awaits the final outcome of the planned exit from the EU on 29th March. In fact, compared to last year, a balance of 22% of respondents believe trade has worsened and a balance of 15% are less optimistic about the general business situation than they were in October 2018. In addition, one fifth of the sample audience are expecting to make redundancies in the coming months.
However, a surprising turn in the report is that manufacturing output is up by an encouraging +41%, despite new order intake being low.
The report also shows that the average price of material costs is dropping. The significant drop in foam chemical prices, particularly TDI, is now feeding through into price reductions, with companies that use foam reporting price decreases in the last four months.
Two-fifths (42%) of companies reported being involved in exporting, with a positive amount of overall sales turnover being attributed to export. Both order intake and output levels were unchanged in the period of the survey, and are expected to remain flat going into the summer months.
Export seems to be the most constant with regards to production and sales. It has been on the rise of late, but recent studies by Barclays Bank found that only 40% of British companies who had the capabilities to export actually do.