For the past two years Furniture sector slashes 25k jobs

For the past two years, the Cebu furniture industry slashed around 25,000 jobs to survive the detrimental effects brought about by the volatility of the peso and the weakening of the country’s major market, the United States.

In a press conference hosted by the Cebu Furniture Industries Foundation Inc. (CFIF) held to announce the opening of its annual furniture and furnishing international exhibition show, the 19th Cebu X, slated March 6-9, 2008, CFIF president Eric Vincent Casas bared that 35 percent of the organization’s total members have already closed shop in the last two years.

Of the total 183 members of CFIF, about 40 companies have declared closure due to financial losses, and the inability to survive the challenges mainly brought about by the weakening of the US market, and the strengthening peso against the US dollar.

Last year, the Cebu Gift, Toys and Houseware Exports (GTH) reported that 35 companies have closed, affecting the thousands of direct employees and sub-contractors.

The 40 companies reported by the CFIF, are furniture makers.

During its ”heyday” the furniture exports industry in Cebu directly employed a total of 80,000, 35 percent of this number and even more had been lost.

“While other companies were not able to make it, those that remain shrunk the number of its workforce,” said Lauri Boquiren, CFIF member of the board, and chairperson of this year’s Cebu X.

Consequently, the industry’s performance last year plunged further to negative nine percent, which is at its lowest performance in the last few years. In 2006, the gross performance of the Cebu furniture export recorded US$111 million.

Cebu’s furniture making industry is composed mostly of Small and Medium Enterprises (SMEs), according to Boquiren those companies that declared closure probably were new players, “but the older ones are still fighting.”

The estimated 25,000 people who lost their jobs in the last few years, are those that were directly employed by the furniture makers, this does not include thousands of sub-contractors who also lost their orders from these furniture companies.

CFIF record showed that as of 2006, there were more or less 140 subcontractors whose livelihood depends on the furniture export business.

Aside from the internal problems, the furniture exports industry is slapped with double-whammy effect of the US recession and Peso strengthening.

She said Cebu furniture is so much American-driven, now that America is suffering from sub-prime problem, real estate crash, the furniture exports industry here is the number one victim.

However, she said the high-end market in the US is still there, but the thicker market has “frozen”.

Because of the dismal state of the industry, CFIF will hold a “smaller” Cebu X this year, while participation decreased by 17 percent compared to last year.

Last year, the three-day international exhibition generated actual sales of US$15 million with a total of 1,400 foreign buyers visited the show.

This year, Casas said CFIF is confident to attract more buyers, as Cebu X is now positioned to be part of the Asian circuit of furniture exhibitions, starting with Malaysia, Manila, Indonesia, Cebu, Singapore, and other Asian countries. —Ehda M. Dagooc