Rising local demand helps exporters cope with losses

The robust demand for world class furniture products from the domestic market have sustained the business of the furniture exporters, offsetting declining orders from abroad.

“The domestic market is now an attractive market for us. We noticed increasing institutional orders from hotels, resorts, restaurants, and even residential clients,” said Cebu Furniture Industries Foundation Inc., (CFIF) president Eric Casas.

Although the furniture exporters have tried to penetrate other markets other than United States, which used to hold 60 percent of the total export volumes for furniture, Casas said players have to re-direct their focus and now actively accepting orders from the local market.

“Players have to adjust in these difficult times,” Casas said. Fortunately, the domestic market has become the savior filling in the gap of slacking orders from the US.

In the past, furniture exporters and makers used to manufacture huge volume of furniture products with almost identical designs for their clients in the US. Now, Casas said makers are shifting to accepting personalized-design orders from specific clients, such as resort or hotel.

Currently, about 25 percent of the furniture production of the industry goes to the domestic market.

Casas said despite the worldwide economic slowdown as the effect of the US weakening economy, the Philippines’ real estate market, and hotel/resort investments have continued to be dynamic and that this has sustained the furniture industry sector.

In the last few months, he said the furniture sector has noticed fewer plant closures, although there are some companies that are still implementing three-day-work-week, shifting, rotation and downsizing, in order to stay afloat.

In the last two years, the furniture sector have lost about 25,000 jobs, as companies declared closures, and bankruptcy due to the US economic slump, and other negative factors that have hit the industry.

Aside from the attractive domestic market, the furniture makers are also looking at other emerging markets, such as Europe, Middle East, Russia, among others.

CFIF on the other hand, is intensifying its support to industry members in providing programs to strengthen the industry’s hold in design capability, because aside from weak US demand, other competing countries like Vietnam and Thailand, are slowly developing their own niches in the world market.