Europe, the world’s second-largest furniture market with a consumption value of around EUR 106 billion, continues to hold a crucial position in the global furniture sector, acting as a pivotal hub for production, market size, and world trade.

In Europe, the sector’s weak performance in 2024 remains evident. In nearly all European countries, negative performance trends have persisted. The German and French industries have been particularly affected, struggling with a sharp decline in construction activity and weak consumer spending. Spain, however, stands out as an exception, with residential construction continuing to provide a growth driver. Similarly, Eastern European countries, historically known for their rapid manufacturing growth, have also been affected by the challenging market conditions, particularly by the poor performance of the German economy. Poland presents another exception, with the furniture sector experiencing modest but positive growth.

Despite difficult market conditions in 2023-2024, the furniture sector has proven its resilience, staying above pre-pandemic levels, supported by a high level of integration and market concentration.

Dominated by major retail chains and manufacturers operating on a European scale, the market benefits from strong internal cohesion and a well-established trade network. This structural strength not only underpins its stability but also drives the substantial concentration of export and import flows within the region.
At the same time, Europe maintains an ongoing openness to global markets. The area accounts for more than 35% of world furniture exports and 45% of world furniture imports. Europe distinguishes itself as an area characterized by an exceptionally high level of business-to-business trade concentration and integration.

In Europe, more than 75% of foreign furniture trade takes place within the same countries. In 2024, 20% of consumption is attributed to extra-European imports, with nearly EUR 22 billion originating from countries beyond Europe. When considering extra-EU exports, a few nations emerge as key players with a significant share of their furniture exports directed outside the EU (for example, Italy leads with 42% of its furniture exports going to non-EU markets).

Export flows destined outside Europe have encountered a slower situation compared with intra-EU exports, primarily attributable to the complexities inherent in the international trade environment. This difficulty stems from various factors, including the possible tightening of protectionist measures, which not only create market distortions but also diminish the sector’s overall competitiveness.

Coupled with geopolitical tensions and economic uncertainties, these elements collectively contribute to the intricate landscape faced by European exports beyond the continent.

European furniture production has become more global in the sense that global supply has closely linked several European companies to complex international value chains and started producing outside Europe. This process took years, and the comparative advantages of Asia’s production costs mainly drove this trend.

European countries were involved in this process, and the offshoring/re-offshoring of production occurred. The globalization trend has recently been curbed: important changes in supply chain dynamics regarding offshore sourcing have occurred, impacting companies’ strategies. This was due to several concurrent factors impacting the scenario, including the continuous reduction in the gap between Chinese and US/European production costs, the reduction of labour intensity due to the progressive advent of technology, the development of regional value chains and the integration of productive systems led by industry 4.0 and finally the increasing demand for product customization and shorter time to market, which are favouring proximity of the industry to its clients.

The chaotic status of international trade regulations has also been mentioned as a factor that creates uncertainties, which, in turn, impacts the expectations of exports and competitiveness of countries. These factors boosted the “back reshoring” trend of part of the production of European manufacturers in some countries.

THE EUROPEAN MACROECONOMIC CONTEXT

The European macroeconomic context in 2024 is marked by subdued growth, political fragmentation and uncertainty. Growth in Europe seems to have reached its lowest point in 2023, with GDP growth slightly weaker than projected in April and July 2024. The IMF growth forecasts for Europe are 1.5% in 2023, 1.7% in 2024, and 1.7% in 2025.
Although goods prices have stabilized, and some are declining, service price inflation remains high in many European countries. This is partly due to rapid wage increases as pay catches up with the inflation surge of 2021–2022.
Looking ahead to 2025, the IMF anticipates a continued decline in inflation but acknowledges that bumps on the road to price stability are still possible. The IMF projects that consumer prices in the European Union will increase by 2.6% in 2024 and 2.3% in 2025.

FURNITURE MARKETS FORECASTS

According to CSIL, in Europe, furniture demand is forecasted to remain almost stagnant in 2025 and slightly improve in the medium term. Some positive factors that could support a recovery include a slight improvement in macroeconomic indicators, an expected easing of inflation and interest rates, and potential wage growth. These factors could boost consumer confidence and encourage spending on furniture.
CSIL acknowledges that forecasts are subject to a higher-than-usual degree of uncertainty. The overall economic and geopolitical environment remains volatile, with potential downside risks.

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CSIL’s Report ‘The Furniture Industry in Europe’ contains all the main statistics and indicators to analyse the furniture sector in Europe. The 30 countries considered in this report are also available as a single Country Report. Find more at https://www.worldfurnitureonline.com/multiclient-research/country-reports