The number of British furniture manufacturers reporting falling margins has fallen to its lowest level for two years amid higher orders and the easing of raw material price increases.
The BFM’s Trade & Price Trends Survey found that the number of respondents that were more optimistic about the general trading environment compared to six months ago had risen by 23%.
That same percentage also reported that trade was better than the same time last year.
The survey, which is held twice a year in spring and autumn, maps out the key factors in the industry including employment, output, costs and exports, as well as giving a clear indication of the opportunities and challenges members anticipate for the coming six months.
October 2022, 86% of respondents reported raw material rises, while in April 2023, rises were reported by only 15%. Rising overheads and labour costs had prompted 69% of respondents to increase product prices in the past six months, with the most common increase being 5%.
No redundancies were reported in the past six months, with none anticipated for the coming six months.
While pressures from skill shortages have improved, with 46% having no issues to report compared to 23% six months ago, 54% still reported moderate to severe problems in recruiting skilled labour.
‘Six months ago, the furniture industry was braced for a difficult winter. Optimism surrounding the general business situation had plummeted to -64% with one in five respondents to the October survey reporting that they were either making a loss or breaking even. With spring has come a new optimism thanks to stabilising material prices, a rise in order intake and a 31% leap in output,’ says Nick Garratt, BFM chairman.
‘More survey respondents have reported falling profit margins (15%), but this is the lowest figure for two years and 38% of respondents are expecting cash flow to improve over the next six months.’
