Brazilian Furniture Production Reacts in May and Grows 53% Over the Previous Month

Furniture World News Desk on 8/12/2020

Photo by f Carlos Ferrari

With the gradual resumption of activities, after a period of quarantine when companies were closed or operated with reduced teams, the Brazilian furniture sector has shown a reaction.  The data can be found in the report “Conjuntura e Comércio Exterior do Setor de Móveis no Brasil” (Furniture Industry Overview and Foreign Trade in Brasil), with figures from May and June, produced by IEMI - Market Intelligence, and commissioned by the Furniture Industry Association of Rio Grande do Sul (Movergs), the organizer of FIMMA Brasil.

Furniture production in Brazil amounted to 22 million pieces in May, an increase of 53.4% when compared to the previous month. Rio Grande do Sul, the leading national furniture manufacturing region, also reported a 42.1% increase in comparison with April.


Exports

Both in May and June, Brazil's exports showed a positive response. While in May there was a 25.9% increase, totaling US$ 36.4 million compared to April, in June there was a growth of 18.9%, amounting to US$ 3.3 million. Rio Grande do Sul also showed an increase of 27.6% in exports in May and 18.6% in June. As a result, the Brazilian balance of trade in June was positive with a surplus of US$ 24.8 million.

In June, the United States was the main destination of Brazil's furniture exports accounting for 41.1% of the total, followed by Uruguay with 9.9% and the United Kingdom with 9.5%. The highlight was also the significant growth of exports to Canada compared to the previous month.

The International Director of Movergs and FIMMA Brasil, Marcelo Haefliger, points out that because of the pandemic, all countries are going through very similar problems, including lockdown, quarantine and financial aid to the population by governments. "Because people have stayed at home for longer periods, they began to care more about their comfort and needs for everyday products. The Brazilian retail market shows that in June there was a rise in sales of household appliances, furniture and mattresses, which consequently led to a greater demand from manufacturers and the same thing is happening in other countries. At the moment, sales to other countries are related to companies that had already been working with e-commerce, that is, those who were prepared were able to benefit more quickly. The prospect in the coming months is that demand for exports of products will return to normal, similar to the levels before the pandemic, not only for e-commerce, but for all markets", he says.

According to the president of Movergs, Rogério Francio, as of June, companies began to resume a certain normality with an almost total return to their activities. "I believe we will overcome this moment. We hope that in this second semester we can intensify this resumption and recover the losses of the first semester. In June we started to see a positive movement, especially towards the foreign market. In the domestic market, the online segment is very strong, which gives a boost to entrepreneurs", he points out.

Furniture industry entrepreneurs, Movergs members, are also optimistic.  Cesar Nepomuceno, commercial manager of Politorno Móveis, says that the resumption, after the quarantine, despite all fears and uncertainties, happened with a gradual improvement in sales. "As a result of the distance protocols adopted by states and municipalities, there was an increase in e-commerce sales both here in the domestic market and also in several markets where we operate abroad. Our concern in this period has always been to respect the protocols, valuing the health of our coworkers and also maintaining our manufacturing pace, aiming to compensate for those days when our production system was stopped. We believe that the second semester should follow the current pace, but with a possible improvement as a result of Black Friday shopping. In this scenario, our concern is that our supply chain can respond to this increase, since many suppliers have reduced their capacity in the post quarantine period and are delaying deliveries," he remarked.

The CEO of Móveis Videira, Rogério Dalla Costa, also emphasizes that the pandemic, for the furniture industry, at first brought many uncertainties, but those who work with e-commerce did not feel so much since the campaign #fiqueemcasa (#stayathome) made people focus on their homes. "June and July were exponential months and this growth happened due to the pandemic. Automatically, the industry is reaping something fantastic, but no extreme is good, as it raises doubts and concerns. At the moment, we have problems with the supply of raw materials and increase in prices that will have to be passed on to the consumer. Exports have also risen, on e-commerce though.  What we see is a positive perspective of demand growth, but it may be limited due to the supply of raw material, creating difficulties for companies. Our expectation for growth is positive, although we do not know if there will be new falls, especially due to raw material issues. All in all, we need to face it with optimism, believe in our ability to reinvent and find alternatives", he points out.