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A business consultancy, based in London, England, John Sacks' JSA Consultancy Services provides expert, in-depth, information advice and guidance as to how to exploit successfully the office furniture and interiors markets in Europe, North America, Australasia and Japan.

German Office Furniture Market Still Growing

Tuesday 27 May 2008

The German office furniture industry maintained its growth course in the first quarter of 2008. The manufacturers, who are members of the BSO (Association of Office, Seating and Object Furniture/Verband Büro-, Sitz- und Objektmbel), increased their turnover in the months January to March 2008 by 10.2% compared to the same period the previous year. Commenting on this positive development, BSO Chairman Hendrik Hund, pointed out: “The investment restraint of previous years has led to strong backlog demand at many companies. We are now benefiting from this. For some time now, the quality of office furnishings and furniture has increasingly become the focus of customers’ attention. In particular, high ergonomic value furniture in high quality, attractive design is enjoying strong demand.” In the past two years, the manufacturers of office furniture were already clearly able to increase their turnover. In 2007, the BSO members reported sales growth of 14.7%. This led to a rise in the office furniture production volume to 2.12 (1.85) billion Euro. In 2007 the office furniture manufacturers benefited from the increased interest in connection with both the domestic market as well as exports. In contrast, foreign suppliers did not contribute to the growth of the domestic market. While the BSO members in Germany reached sales growth of 14.5% (according to figures released by the Federal Statistical Office), imports were in decline. Imports of wooden and steel framed furniture fell by 2.6% compared to the previous year, while imports of swivel chairs declined by 0.2%. The most important export markets for German office furniture were the other neighboring countries of Holland, France, Switzerland, and Austria. In terms of exports beyond the borders of the European Union, business and trade particularly with Russia and the Gulf states developed at a positive level. According to observations by the BSO, in both regions the high quality associated with “Made in Germany” continues to apply as a powerful sales argument. In the area of office chairs, the export quota of total turnover achieved by the BSO member companies in 2007 was 41.7%. Nevertheless, 23.1% of framed furniture, which is more difficult to transport due to its bulky volume, was exported abroad. The productivity factors for the German office furniture manufacturers also developed at positive rates last year. In this connection, the BSO member companies increased sales per employee by 9.0% and sales per rendered working hour improved by 8.4%. In 2007, for the first time in many years, additional staff and employees were taken on once again. Compared to the previous year, the number of employees increased by 4.9% to around 12,600. Due to the turbulence on the financial markets and slight decline in worldwide economic activity, the BSO expects lower growth compared to last year. Currently the association assumes an average growth rate of 4% to 6%. As Chairman Hund also explained, the trend in raw materials prices is a cause of concern for the German office furniture producers. In order to compensate for the rising costs of metals, wood, and plastics, which in some cases have reached double figure percentage increases, as well as the increases in energy and logistics costs, the beginning of the year already saw office furniture prices rise by an average of 5%. According to the BSO, the fact that the prices have not increased further is in particular due to the increased efficiency of company procedures and processes. Further increases in material costs will however necessitate a renewed price adjustment by the end of the current year at the latest.

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