Recently, the Russian Association of Furniture and Woodworking Industries (AMDPR) released a new version of the 2022 industry forecast report.
According to the report, after IKEA announced its withdrawal from Russia in March, AMDPR accused the company of not communicating well with furniture factories and consumers before the withdrawal, but now Russia has stepped up production, and there are a large number of IKEA products substitutes on the market.
AMDPR Chairman Alexander Shestakov said in the report: “After a successful 2021, we are rejoicing at the waning impact of the pandemic on the industry and are confident in future growth. Now that has changed and the market is in turmoil. state."
The strong growth in furniture demand in March and April had come to an end in May, the report said. Throughout 2022, furniture makers expect sales to fall by at least 50% this year amid weak demand due to lower consumer incomes and high inflation.
However, some more optimistic furniture makers believe that by autumn the Russian market should stabilize and furniture companies can operate normally. The reason for the business optimism, Shestakov said, was the large number of new housing schemes coming online this year, coupled with some relaxation of housing standards.
Furniture prices rose by an average of 12.5% in the first quarter of 2022, higher than the price increase for the whole of 2021. As in 2021, furniture prices from January to March 2022 will rise above the headline inflation rate over the same period.
"The price increase is due to the fact that Russian furniture manufacturers are highly dependent on imported materials. More than 90% of furniture accessories, fabrics, and coatings need to be imported. Due to the depreciation of the ruble, the price of these materials has increased significantly, and logistics has also changed," said Shestakov. It’s more complex, which seriously affects the production cost of the product.”
"Furniture furniture prices will continue to rise after furniture factories run out of these materials."