Biznes Fakty
The furniture sector is in trouble. Layoffs are on the horizon.
Between 2022 and 2024, the output of furniture in the European Union experienced a downturn, and the circumstances in Poland’s furniture market have also worsened. Should the sector not manage to boost its revenues, it may have to streamline its workforce while contending with competition from Asian firms, according to Krzysztof Mrówczyński of Bank Pekao.
In his commentary on the report „Current Situation and Prospects of the Wood and Furniture Industry,” Mrówczyński highlighted that the furniture industry is undergoing one of the longest economic contractions in its history, which began in the latter half of 2022. The primary factors contributing to this include the energy crisis, the conflict in Ukraine, and the rise in interest rates coupled with inflation.
The furniture sector faces challenges
He noted that by 2024, the average production volume was 12% lower than in 2021, although the decline in Poland was somewhat less pronounced. He added that the nadir of production decline in Poland was reached in 2023, with initial signs of recovery evident in the latter half of the previous year. For the entirety of 2024, production at constant prices rose by 2% year-on-year, whereas nominally, it dropped by 4% year-on-year.
– The most significant reductions compared to 2021 were observed last year in sales to the Visegrad Group nations (totaling over EUR 0.5 billion, or 34 percent), Germany (nearly EUR 200 million), and both Great Britain and Russia (approximately EUR 100 million each) – prior to 2022, these nations represented 55 percent of the total value of Polish furniture exports – remarked the Pekao expert.
He further mentioned that the stagnation in the eurozone is causing a standstill in the domestic furniture sector, which recorded a 1% lower annual production value in the first half of 2025.
The issue of rising wages
The bank representative emphasized that increasing wages are an added strain on the industry, exerting pressure on profit margins and compelling companies to optimize their workforce.
„The proportion of furniture companies reporting a net loss rose to 31 percent at the close of 2024, up from 24 percent the previous year, surpassing the manufacturing average (25 percent),” Mrówczyński stated. He added that the highest rate of such businesses (35 percent) was found among small enterprises employing 10 to 49 individuals.
According to the expert, the adverse labor market conditions for producers are expected to persist in the medium term, leading to further wage hikes. He predicts that average salaries in the corporate sector will increase by nearly 9% year-on-year this year and by 7% year-on-year the following year.
Challenges Facing the Furniture Industry Shutterstock„If furniture companies do not see significant revenue growth during this period, they will have no choice but to continue optimizing their workforce or accept further reductions in profit margins. This is particularly true as market conditions are intensifying competition among manufacturers in international markets. The steadily enhancing quality of Asian manufacturers represents a growing challenge for Polish furniture firms, which often compete more on pricing than on branding,” Mrówczyński asserts.
US Tariff Policy and Asian Competition
He believes that stricter US customs regulations could also disrupt the sector, potentially leading to a decline in Polish furniture exports to the United States, particularly as an influx of production from low-cost countries enters the EU market. He warns that this production may shift away from the US market and be redirected to other global regions. He added that the bank’s analyses suggest that the industry is more vulnerable to these negative impacts than the broader Polish manufacturing sector.
– A challenging issue that may also influence the competitiveness of the domestic furniture sector (and the entire wood supply chain) is the cost and availability of raw materials – once a strong point for Polish manufacturers, it has increasingly become an additional hurdle – noted the Bank Pekao expert.
However, he indicated that these challenges might be somewhat mitigated by the anticipated decline in interest rates in Europe and Poland and the hope for a more robust recovery in the housing and renovation markets.
The information provided by the expert is derived from the report „Current Situation and Prospects for the Wood and Furniture Industry” published by the Polish Chamber of Commerce of Furniture Manufacturers, which aims to represent the interests of its members and shape principles of fair competition, among other objectives. The complete report is set to be unveiled at the 10th Polish Furniture Congress organized by the Chamber on September 10th of this year.
