Italian furniture: challenges and opportunities for the industry

Italian furniture is one of the many excellences of our manufacturing industry, which has always been synonymous with quality and originality.

The supply chain is diversified and populated by many companies: from those specialised in the production of raw materials to its processing, through design and the production of internationally appreciated furniture.

What opportunities are there for companies to seize? What are the major challenges to be faced at the moment and beyond?

Italian furniture: on the road to recovery

If 2020 was the year of the stop, partially mitigated by last summer’s reopening, 2021 will be the year of the relaunch.

With a positive trade balance of more than €7.6 billion in 2019, Italian wood-furnishing is undoubtedly one of Italy’s key economic assets.

The production and logistical difficulties of the past few months have hit both the domestic and foreign markets, which have always been essential for companies. With an overall drop in turnover of 9.1%, 2020 closed negatively for operators in the sector. But the latest figures reveal a different scenario.

The current recovery sees Italian furniture as a protagonist, as emerges also from the recent report dedicated by ICE and Prometeia to our international trade.

Looking beyond national borders will continue to be a fundamental factor for the country system: with the value of exports now equal to 1/3 of GDP, our companies are called upon once again to make a difference.

In this sense, the wood-furnishing sector is no exception, and in recent months it has been estimated that production will grow by 5.3% in 2021.

E-commerce is certainly a preferential channel for this purpose, with a turnover of 2.7 billion euros for the home and living sector in 2020, as shown by the Digital Innovation Observatory of the Milan Polytechnic.

Presiding over both the digital and physical dimensions – with particular regard to foreign countries – remains a crucial goal for reaching Italian and foreign consumers.

More specifically, which are the countries to focus on in the coming months?

This question is once again answered by the ICE-Prometeia analysis, which reveals excellent growth opportunities in both mature markets and emerging territories.

Among the first are areas such as the United States, France, Sweden, Canada and Australia, where a decisive rise in sales of Italian furniture is expected in the two-year period 2020-2022.

Forecasts of double-digit growth in demand are also a precious opportunity in areas that have not been covered to date, such as South America, with interesting prospects in countries such as Chile and Colombia.

The progressive reopening of the sector is also testified by the confirmation of the next edition of the Salone del Mobile. The event, scheduled to take place in Milan from 5 to 10 September, is a unique opportunity for companies: a time to give Italian production the right visibility again, focusing on quality and innovation.

Two distinctive factors of the sector, ready to return to the forefront also through one of the most representative international fairs for interior design. In this scenario characterised by positive signs, however, there are also major challenges.

What are the most pressing ones for companies?

Sustainability, new products and raw material costs

The need to rethink current strategies is also pressing for the furniture industry and its supply chain. Product innovation in the direction of ever greater sustainability is now essential, and Italian companies have long understood this.

Combining design and new production methods, many furniture companies are constantly trying to reduce their environmental impact, gaining a competitive advantage and making the EU’s ecological transition objectives a reality.

A vision based on sustainable development is therefore beginning to take hold in the supply chain, as a report by the Symbola Foundation and FederlegnoArredo shows: attention to recycled and recyclable materials, reduction of energy consumption and the issue of quality certifications are now increasingly in demand, especially in advanced economies.

Added to this is a change in consumer habits, especially in the contract segment: the growing mix of face-to-face and remote work imposes the need for new solutions, bringing our home closer to the office.

The study and creation of innovative products is therefore one of the pillars of the new strategies of companies, called upon to seize the transformations of the market.

These important changes are also accompanied by operational difficulties, first and foremost the increase in the price of wood that has recently affected the supply chain, with repercussions on the building industry.

In fact, the price of timber for construction has risen by 60-70% compared to September 2020 prices: a leap forward caused by the increase in demand in recent months. Rethinking supply policies becomes a priority in this context, reducing dependence on foreign markets.

Italy is in fact fifth in the world for imports of hardwood sawn timber and seventh for coniferous sawn timber: a situation that could change thanks to the valorisation of the local forestry heritage, through its planned use.

The industry’s supply chain has shown itself to be resilient and capable of adapting to recent changes: in order to do even better, it will be necessary to maintain this spirit, without forgetting the refinement that distinguishes the sector’s high-end products.