Optimistic outlook for furniture industry

By PAULA OLIVER

The billion dollar New Zealand furniture industry has a high-gloss outlook, but faces twin threats from cheap Asian imports and "snobby" Italian designs.

A study out today forecasts a turnaround from five years of sluggish growth. The BIS Shrapnel Forestry Group predicts sales will increase by 6 per cent in the current financial year and by a further 5 per cent in the following 12 months.

Principal survey author Andre Neumann expects growth will flatten out over later years.

The study, Australian and New Zealand Furniture Industries 1999-2004, says that manufacturers in both countries have seen sales grow by just 10 per cent since 1995, or little better than the rate of inflation.

"The survey revealed quite a deal of optimism and buoyancy among manufacturers," said Mr Neumann.

"They have come through a time of quite tough conditions, and now things are looking up."

The survey of 140 furniture manufacturers late last year showed that imports far outweighed exports in New Zealand, with a deficit of more than $80 million.

Cheap imports from Malaysia, Indonesia and China were partly responsible for that, but flair designs from Italy were also being imported in greater numbers.

Mr Neumann said the innovative and trendy Italian designs had a bit of "snob factor" attached to them and that made them attractive in New Zealand.

He said strategic attempts by groups to break into the Australian market had paid off with 90 per cent of the $85.2 million exports in the September year going to Australia.

New Zealanders had not only been selling native timber furniture to Australia, but also innovative designs using pine, which is commonly manufactured in Australia.

Another group had revealed it was eyeing a move into the American market, which Mr Neumann said had enormous potential for our furniture manufacturers.

"It's colossal, and suddenly the size of our total imports look very small alongside it."

The New Zealand furniture industry employs 9500 people, or 4 per cent of the manufacturing workforce. That is a decline of 6 per cent since 1995.

Nearly 80 per cent of them work exclusively with timber, the largest base being in the Auckland region.

Retail spending is low compared with Australia, with each New Zealand family spending $10.40 per week on furniture, compared with $12.60 in Australia.