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Romanian Furniture production in 1st 1/2 of 2008 is up to 1 billion euros

Monday 8 September 2008

Furniture production in Romania, in H1 2008, stood at one billion euros, up 9% from the same period last year, it can exceed 2 billion euros at the end of the year.
Local producers, who, in most cases, did not invest in own stores, have been affected by the rise in the costs of raw materials and utilities. Accustomed with advance facilitated by export, furniture companies have failed to adjust their offer to the domestic market, which led last year to bankruptcies.

Over 2005-2007, there occurred the first cuts in staff in the furniture industry, the trend was kept in the first half of this year, when the manpower declined 5%. On the list of the problems of relevant players, there is the migration of workforce. For example, leader of the local furniture market, Mobexpert Co., numbered at the beginning of this year 1.000 people less than at the beginning of 2007.
In H1, the domestic sale of furniture amounted to 650 million euros, up 19% from the same period last year, read data from the Association of Furniture Makers in Romania (APMR).

One of the most dynamic sectors was that of office furniture, with a growth rate over that of the market.
In H1, furniture export reached 600 million euros, up 12% from H1 2007, according to APMR. After an extremely good period until 2005, backed by the depreciation of the Romanian leu currency vs. hard currencies, when increased reached even 40% annually, in the past year the export has no longer been so spectacular.
After the developments in the currency market between 2005 and mid-2007, there were few solutions, such as reorientation towards the domestic market and productivity growth.

If the leu’s appreciation has been bad for exporters, it has been good for importers, reads the Business Construct. Over 2005-2008, imports have doubled, reaching 40%. The main import countries are Italy, Poland, Germany. Another trend has been rise in the segment of luxury furniture, coming almost fully from import. In H1, Romanians bought imported furniture worth 20 million euros, climbing 34% from the same period last year. Imports have not surpassed yet the sales of local makers.

In furniture retail, the year 2007 marked the start of a period of segmentation. If a few years ago, big operators were dominating the market of generalist type, the first specialized chains have appeared of late. Significant is also the appearance of big international retailers, such as Ikea.

According to data from European statistics office Eurostat, the price of furniture in Romania is among the lowest in Europe. It is related also to the developments in the currency market, according to companies, rises of a few percent only are not felt at the level of business, and usually by customers, either.

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