According to the CSIL report “The European market for office furniture“, the office furniture market in Europe continues to resume and is above the pre-pandemic level.

The gradual removal of restrictions caused by the coronavirus pandemic has impacted positively the business environment. However, the conflict in Ukraine has reduced the supply of materials and brought uncertainty to the market, causing radical price increases. Under those circumstances, the growth of 2022 has been strongly conditioned by rising inflation.

Production in values increased by +13% and amounted to EUR 9,463 million, but the performance includes a +12.1% price effect. This means that in real terms the production volume in Europe progressed by only +0.9%.
At the industrial level, the sector employed a total of 69,000 workers in 2022, meaning a loss of around 2,000 units on the pre-pandemic level. Also, the number of production plants in Europe is lower than in the past, but the level of technology is far higher. The investments in machinery remained predominant accompanied by efforts to increase sustainability and reduce environmental impact.

Today the top 20 players represent an estimated market share of about 48% of total European production and this share increased significantly over the last few years. Part of the company growth has been organic with players outperforming the sector average, but most part of the market share of some top players has been gained through M&A operations.

UNCERTAIN MARKET PROSPECTS

European office furniture exports amounted to EUR 4,614 million in 2022, recording +11% growth in 2021. The increase is almost totally referred to the office furniture (excluding seating) which increased by +16%, while office seating exports remained almost flat (+1%).
Germany, Poland, and Italy are by far the largest European exporters representing 17%, 13%, and 12%, respectively, of total exports.

European office furniture imports showed a drop in 2022 with a -4% decrease in 2021, imports amounted to EUR 4,819 million in the year. After booming in 2021, office seating dropped by -17% in 2022 when flows originating in Asia started to return to a ‘normal’ level.

According to real estate observers, European office take-up resumed and currently stands above the pre-pandemic average. European consumption of office furniture increased by +4.8% in 2022 to a value of EUR 9,668 million. Among the largest Western European markets, Germany, France, the United Kingdom, and Italy represent about 55% of total office furniture demand.

Market prospects are uncertain. Overall, GDP growth in 2023 is forecast to decline to 0.7% in advanced European economies and to 1.1% in emerging European economies (excluding Belarus, Russia, Turkey, and Ukraine) before rebounding to 1.4% and 3.0% in 2024, respectively. The European economy is not currently expected to return over the medium term to the rates of growth that prevailed before the pandemic.

CSIL consumption forecasts show that the European market for office furniture in real terms (excluding price effect) is expected to downgrade in 2023.

INCREASING DEMAND FOR PHONE BOOTHS AND ACOUSTIC PODS

In the last three years, we saw the acceleration of several structural processes leading towards more fluid, multi-format real estate portfolios. Expanded employee choice includes more remote working in satellite or suburban locations that do not require extensive commuting.

Today, priority is assigned to workspaces that encourage active collaboration and the informal exchange of views, with spaces for presentations, seating areas, and break zones to foster conversation and discussion. At the same time, there is a parallel need for zones that allow for better concentration, and avoiding distractions.

The mentioned factors have clearly impacted office furniture production. Effects are remarkably visible especially if looked at for a six-year span, when the weight of single product segments changed significantly. Return to offices, pushed the expansion of furniture for communal areas, ancillary products, soft-lounge seating, micro-architectures, and acoustic products whose values increased by over 50% compared to 2017, thus becoming the fastest growing segment.

A relevant portion of this value is composed of Acoustic Booths/Room in Room Systems whose demand boomed in the continent. Europe is also the leading producer of phone booths worldwide with an increasing number of specialist manufacturers (developing through phone booths 70% or more of their revenues) and many traditional office furniture manufacturers progressively introducing phone booths in their collections.

For some of the office manufacturers, already involved in the production of partitioning and acoustic elements, pods are often manufactured internally. In some other cases, companies have established distribution agreements with external specialist suppliers.

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CSIL’s Report “The European market for office furniture“, provides an extensive analysis of the office furniture sector in Europe, with historical data on key indicators, and demand prospects, delving into the performance of the leading manufacturers, the product categories, and the distribution.