In Austria, furniture worth a total of €1.3 billion was produced in 2024, compared to €1.4 billion in 2023. “In the first half of the year, production output decreased by 7% and exports by 8%. Imports were down by 6% – with the exception of imports from China which grew by 16%,” Dr. Georg Emprechtinger, Chairman of the Austrian furniture industry in the Austrian Timber Industry Association, analyzes.
Against the backdrop of lower interest rates, a large savings volume and postponed furniture purchases, companies are cautiously optimistic that the economy will pick up again this year, according to Emprechtinger. “With regard to 2025, there are already individual aspects that make us cautiously optimistic about the new year. A slight upturn in consumer demand is to be expected. Measures introduced to boost the construction industry will also have a positive effect – but with a corresponding time lag for furnishing, of course,” he explains. One can assume that, despite the challenges, furniture trade has a good chance of overcoming the recession, especially in the middle class. “Housing and furniture are still of central importance to people. However, high living costs, the war in Ukraine and global crises are negatively affecting consumers. In uncertain times like these, money is not spent carelessly: despite higher real-term incomes, the savings rate is 10%,” Emprechtinger says.
A positive aspect is that people are more conscious in their purchases and attribute more importance to durable, high-quality products, for which they are prepared to pay more.
The strengths of the furniture industry
Austrian furniture manufacturers excel in many areas. Their furniture stands for high quality, durable products and traditional values. “With decades of craftsmanship and woodworking expertise as well as modern production technologies, the Austrian furniture industry is well positioned for the requirements and challenges of the future,” the chairman of the Austrian furniture industry says. According to Emprechtinger, Austrian companies boast low complaint rates, reliable, punctual deliveries and the ability to flexibly implement individual customer requests. “Sustainable furniture and socially acceptable production are in demand and offer a high potential for differentiation both in public contracts and for private customers,” Emprechtinger emphasizes.
Challenges for manufacturers
Nevertheless, furniture manufacturers are also faced with significant increases in production and non-wage labor costs as well as in raw material prices, energy and transport costs. There are also low-price strategies in the market. Furthermore, cheap imports from China are also increasing. The result is falling profit margins and immense cost pressure for medium-sized furniture producers. The weak construction industry is also a major challenge. The chairman of the Austrian furniture industry explains: “Every new housing unit entails around two to three sets of furnishing – but residential construction in Austria is currently not showing signs of a recovery from the economic slump.” According to Statistik Austria, there were only 10,672 building permits or permitted housing units in the second quarter of 2024. That corresponds to a year-on-year decrease of 18%. A further decline is expected for the full-year 2024.
Emprechtinger cites regulatory requirements, such as environmental regulations and complex bureaucracy, as further challenges. These require a lot of time from companies which they cannot spend on their core business as a result. In addition, there is an acute shortage of skilled workers in Austria, especially in the various trades and technical fields.
The raw materials market
For the furniture industry, the availability of hardwood is of particular importance. “As was recently discussed at the 10th International Hardwood Conference in Vienna, increasing global tensions are also affecting the reliability of the raw material supply. The proportion of hardwood forests in Europe is increasing, and Europe’s importance in the production of hardwood products as well as the availability of hardwood will increase. Climate change is causing those trees to grow faster. At the same time, though, pests are threatening the vitality of the stands, and the health of the forests is crucial for a stable raw material supply. Adapting forest management to these changed conditions is just as important as promoting the use of wood. What we need is a cascading use of wood: That is a crucial step for the furniture industry towards achieving resource efficiency and increasing added value as a recyclable material as well as climate protection,” Emprechtinger explains.
