When you are about to take a picture you say: “Well, don’t move”… this is quite a hard thing to do if your object are the Central-Eastern European countries.


The level of integration of these countries with Western Europe is constantly increasing. Major social, political and economic changes involve all the countries of the area, although with relevant differences among them. This moving-on picture creates challenges and opportunities for all actors in the chain (from raw material to wood based products, from components suppliers to the furniture industry) and leads to a scenario of sustained trade relationships.

Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Slovenia and Hungary are new members of the European Union. Bulgaria, Croatia and Romania are candidate members and Russia is the EU’s largest neighbour, brought even closer to the EU by the 2004 enlargement. Russia is a main importer, absorbing furniture for more than 1 billion Euro in 2012. Measures taken by the Government of the Russian Federation resulted in a drop of custom duties with increasingly high import flows of furniture and furnishings, mainly upper end products.

Generally speaking, the trade barriers between new members and the Community already disappeared and/or are going to disappear for candidate members, for the benefit of all the countries of the area. As a consequence, these countries have increasingly become significant trading partners and promising new markets for various goods, including furniture.
POLAND, with an area of 312,683 thousand sq. m. and a population of about 13 million families accounts for a rather high GDP growth, even if per capita GDP is just 46% of the EU average, lower than that of old members like France or Germany, but also lower than EU newcomers like the Czech Republic and Hungary.
The country is absolute leader of furniture export flows in the area.
Such export capacity was achieved thanks to massive in-flows of foreign investment that helped local sector to modernize, particularly in the high labour intensive upholstered segment.
The most active investor is Germany that controls about 80% of the largest furniture manufacturers.

Focusing on the upholstered furniture production, we find Poland as a leading manufacturer in absolute terms, even if two digit growth was registered for most of the country considered. In particular, +12% for Poland, +17% for the Czech Republic, +14% for Russia and +18% for Romania.

The delocalization process in these countries is something which is constantly moving on; for example former investment in Poland with lower labour costs with respect to Germany have been shifted again to other countries, that offer more profitable conditions (lower raw materials and labour costs).
The CZECH REPUBLIC is another important player, both in the kitchen and upholstered furniture segment, accounting respectively for 12% and 20% of total furniture consumption.
With a very high export potential, the Czech Republic is among the top 15 furniture exporters in the world. Local furniture consumption is also growing, with total private consumption more than doubling in the last ten years.
Most Czech furniture manufacturers are medium-sized enterprises, which account for one third of the total furniture sector output. Unlike other Eastern European countries such as Poland, the flow of foreign investments to the Czech furniture sector is still relatively slow.

SLOVAKIA, which started to grow significantly from 2000 thanks to large inflows of FDI (foreign direct investments), HUNGARY, with the presence of some leading Italian and German companies, SLOVENIA with its noticeably growth in exports, are other important players in the area.

ROMANIA and the BALTIC STATES should also be considered in this picture because of their low cost of labour, their increasing importance in the furniture market and their capacity to attract foreign investment.

The article refers to the following CSIL Multiclient Reports:
• THE FURNITURE INDUSTRY IN THE EUROPEAN UNION, VOL. II – Edition V, Year 2012 – available now
• THE KITCHEN FURNITURE MARKET IN CENTRAL-EASTERN EUROPE – Edition I, Year 2004 – available now