British Furniture Manufacturers’ (BFM) latest survey of the trade has revealed 96% of respondents have increased product prices since October – and further rises are expected.
Soaring material prices combined with rising overheads and labour costs have put a squeeze on profit margins.
And, while the level of output is set to remain the same over the next six months, new order intake is expected to fall significantly.
“BFM’s twice-yearly surveys give a crucial insight into what is happening on the ground across our industry," says BFM CEO, Sean Holt. “54% of those who responded in April said their business situation is worse than it was six months ago.
“Many are putting the poorer trading environment down to the rising cost of living, material and energy costs, shipping rates and the Ukraine war.
“With 96% having already raised prices – some by as much as 10% - since October, but more than half of respondents reporting an adverse impact on gross profit margins, we have to anticipate that trade prices will rise again in the coming weeks and months.
“This comes at a time that 54% of respondents predicted a significant drop in new orders.”
The BFM furniture trade report for April found that 96% of respondents had reported rising labour costs, 100% said overheads had increased and an average rise of 18% was recorded across material prices, although one in six said plywood prices had doubled within six months.
79% of respondents also reported experiencing a skill shortage, with 21% describing it as ‘significant or severe.’
BFM represents more than 160 member companies in the furniture industry, from sole traders making hand-crafted furniture to household names with stores across the nation.
A summary of the April report is available at www.bfm.org.uk.