Office Furniture

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> Learn more about Saša Spiridonov

Saša Spiridonov has been working for Interconnection Consulting since 2013. He is a market research analyst with many years of experience in the analysis of various markets and the development of forecast models. On the basis of his well-founded forecasts, numerous companies in this sector are reverting to his studies for strategically important decisions. His long-term close cooperation with the most important players guarantees the high quality of these industry reports.

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Tel:+43 1 375 00 15 13

E-mail:spiridonov@interconnectionconsulting.com

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IC Market Tracking Office Furniture in Western Europe

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IC Market Tracking Office Furniture in CEE

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IC Market Tracking Office Furniture in North America

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IC Market Tracking Office Furniture in Middle East and Turkey

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IC Market Tracking Office Furniture in Western Europe

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IC Market Tracking Office Furniture in Central and Eastern Europe

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Russia’s Rebound Helps Office Furniture Market in CEE

The office furniture market is a clear example of the healthy convergence between Western Europe and the CEE countries. And with a growth rate in sales of 5.2% in 2017, Central and Eastern Europe will continue to catch up to the West. In fact, this rate of growth is expected to be maintained to 2021. According to a study by Interconnection Consulting, the total market volume in the countries analyzed (the Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, the Ukraine, Russia, and Poland) was EUR 898 million.

 

Poland Soon #1

Such significant growth has also benefited from the fact that Russia is once again also showing an uptick in sales figures (+0.9%). Although Russia is still the largest market for office furniture in the CEE countries, Poland is set to overtake it this year. With a growth of 5.6% last year, Poland was also the market with the second-largest growth rate. Only Romania had an even stronger showing (+6.1%), though with a far smaller overall market.

 

Comfort Is King

Comfort is increasingly becoming an integral part of office life, explains Sasa Spiridonov, author of the study. So it is hardly surprising that lounge chairs, with a predicted annual growth of 6.2%, will be gaining heavily in market shares. There is also an apparent trend away from open-plan offices and to smaller units, which explains the anticipated above-average growth (+5.1% annually) of dividing walls in upcoming years.

 

Swivel Chairs Still Leading the Pack

The largest product group continues to be swivel chairs, with a market share of 31.1%, followed by desks (21.0%). With annual growth rates of 5.9% and 4.6% respectively, both sectors are forecast to do very well to 2021. By contrast, the prospects for storage furniture are less rosy. With anticipated annual growth of just 2.7% through the forecast period, storage will continue to lose market shares. Although direct sales is growing more than indirect sales, indirect sales continues its dominance, with a market share of 57.6%.

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Austrian office furniture market feels tailwind due to construction

Last year, the Austrian market for office furniture recorded its first rise since 2011 (+1.1% in value). Thanks to the continuing strength of construction activity in the non-residential sector, growth will continue in the next years. According to a study by Interconnection Consulting, an average annual growth of 1.6% can be expected until 2019.

 

Rising office rent raises construction activity

 

At the moment, the rent for offices is moderately rising due to the current low or inadequate offer of office spaces, which in turn contributes to the construction of new offices. Last year alone the number of completed offices increased by 23.1%. There is a valuable project pipeline in many good locations. Just in 2016 and 2017 in Vienna (among other cities) the completion of the following buildings is planned: the ÖAMTC headquarters (gross leasable area: 16.000m²), the post office headquarters (gross leasable area: 49.500m²) or the Smart Campus (27.000m²). Overall Interconnection predicts an average annual increase of 3.6% until 2019 in this sector.

 

Online conferences lead to declining sales of conference furniture

 

With a share of 18.9%, swivel chairs form the strongest product segment in the 221 million Euro office furniture market in Austria. From other seating, conference chairs follow  with 12% market share and lounge chairs  with 6.7%. Despite having one of the smallest market shares, lounge chairs along with swivel chairs and work tables make up the fastest growing product segment in the entire office furniture sector. Growing Internet communication at the workplace (emails, online conferences) is affecting the demand for conference furniture (conference tables, conference chairs), which leads to losses of sales. Clients don’t spend as much for conference furniture as they used to, which results in a drop in average prices. “By 2019, the trend will continue, as meetings are shifting from classic conference rooms to informal spaces”, says Neva Rukonic, author of the study.

 

Vienna dominates the office furniture market

 

Numerous major projects with increased demand for executive furniture allowed large companies to further increase its market share (37%) as a customer of office furniture. Market growth in the large companies client-segment was 4.4%. The largest decline was in the segment of the public sector (-3.7%) where cuts on office furniture had to be made due to declining budgets. The main drivers for the office furniture market are industry and the financial sector. As far as regions are concerned, Tyrol noted the best development. Although Vienna is the largest office furniture market with a market share of 31.5%, Tirol could produce 3.6% market shares, thus representing the best development (+3.4%). Also Burgenland and Lower Austria exceeded the national average in terms of growth. Vorarlberg has the worst development among all of Austria’s states, followed by Carinthia and Salzburg.

 

Market concentration has increased through consolidation

 

The Austrian market for office furniture is increasingly exposed to foreign competition. An example for this was the contract for the furnishing of Erste Campus. A business volume of 16 million Euros was one of the largest projects of the year – and awarded to the Swiss residential and office furniture manufacturer Vitra. The consequence of the increasing internationalization is the consolidation of the market, which results in the merging of businesses. Last year, the investor Erhard Grossnigg and former Economy Minister Martin Bartenstein took over the Waidhofner office furniture manufacturer Bene as well as their competitors from Burgenland – Neudörfler strengthening their company BGO Beteiligungsverwaltungs GmbH as one of the leaders on the office furniture market. The manufacturer Svoboda and Hali were again taken over by the faw Unternehmensberatung in order to defend their market position. These two groups together make up 46.9% of the office furniture market. The market concentration of the office furniture market has risen sharply not only because of the shakeout tendencies. Thus, the market shares of the top 10 companies in Austria increased by 5% to 72.0%.

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May the furnishing begin - The office furniture market in Central and Eastern Europe is recovering

The office furniture market in Central and Eastern European countries is slowly recovering and assures a positive outlook in the coming years. These are the results of a recently completed study by Interconnection Consulting. After many years of decline, the overall market achieved a volume of 731.2 million Euro in 2014, which represents an increase of 4%. The obvious market victor is Poland with a growth rate of 5.7% compared to 2013.

 

Poland and Hungary – overall winners

After many years of decline, the market has experienced growth for the first time. The market value of office furniture in Central and Eastern Europe in 2014 amounted to 731.2 million Euro. In value terms, the overall market in the top 7 countries of Central and Eastern Europe increased by 4%. All 7 surveyed CEE regions except Bulgaria ( -3.0 % ) and the Czech Republic ( -0.7 % ) reported a positive result. With a share of 57,9%, Poland has the largest market in the CEE countries. Despite economic difficulties and high unemployment, Poland is clearly an overall winner in the market (increase of 5,7%). Hungary holds the second place and with a 4.7% market growth also reports a positive result.

 

Local players dominate the market

 

Unlike Western Europe where many international players are active in the respective national markets and increasingly win market shares, Central and Eastern Europe is ruled by different terms. The companies operating in Western Europe have not yet extended their tentacles in CEE countries. Thus, the market in Central and Eastern Europe is dominated by 22.2% of the local top 10 companies.

 

 

Seating furniture: the market linchpin

Generally speaking, the office furniture market is divided into the following product groups: conference tables and chairs, storage systems, desks, swivel and lounge chairs and partitions. The ratio of the individual product groups varies from country to country. In Poland, for example, swivel chairs form the strongest segment (30.6%), while in Slovakia swivel chairs only hold a share of 13.8% and tables and storage systems, each with a 30 % share, are experiencing a boom. Nevertheless, seating furniture builds the largest share of the market not only in Western Europe, but also in CEE countries. More than six million chairs were sold in 2014, 2.8 million of which were swivel chairs. A positive side effect: the prices helped both the volume of sales ( 3.3% ) and the value in the amount of ( 4.9% ) to increase.

 

The road to recovery continues

Due to the economic recovery in Central and Eastern Europe, a further decline in unemployment and the upward trend in the construction industry, Alexandra Peštová, Market Analyst of Interconnection Consulting and author of the study, expects an overall market average increase of 4.6% in the forecast period until 2018. By 2018, the market will grow at a volume of 874 million Euros. Nevertheless, the pre-crisis level will not be reached. The construction and the establishment of new office buildings and spaces positively affect the office furniture market with a growth of 2.9%.

 

Notable price differences between East and West

The office furniture market in Western Europe compared to Central and Eastern Europe is in many respects very similar, however, the strong divergence of the price level is on average 400 %. The average price for a burlap swivel chair in Central and Eastern Europe is 67 Euro, while in 2014 in Western Europe one had to pay 287 Euros.

 

Central and Eastern European countries like it classic

Although Google, Facebook and Co have been exemplifying the trend towards open communication areas for some time now, this trend is still making its way into Central and Eastern Europe very hesitantly. The CEE countries still love classic office furniture as opposed to Western Europe. Nevertheless, the second largest group in storage systems with a share of 21.8% will have to accept losses in favour of partition walls due to emerging trends in the next few years.

 

 

This study examined the office furniture market in 7 countries in Central and Eastern Europe (Poland, the Czech Republic, Slovakia, Hungary, Romania, Bulgaria and Slovenia).

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Deutscher Holzfertigbau Verband

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ELK

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Epson

EPSON is satisfied with the Interconnection's way of communication with the market and with clients. EPSON is also appriciate the Interconnection's continuous work trying to aim the report to be at the higher level. As a result, EPSON rely on Interconnection data, for the market of POS Printers and Systems.

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Saint Gobain

Long experience and deep understanding of the construciton industry markets make up the quality of the IC studies. Interconnection Consulting is a constant companion concerning the assessment of markets and helpful for decision-making.

Bernd Blümmers (Directeur General, Saint-Gobain Solar Systems, Central Europe, Aachen)

Salamander

Interconnection Consulting reports deliver a worthfull external perspective and are so a good contrast with regards to our internal market point of views.

Pedro Posada (CEO Salamander Industrial Products Spain)

Scandinavian Business Seating

The IC Report gives a very good overview of the Western European office furniture market, in a well-structured way. The data is helpful to better understand the market developments and drivers.

Beatrice Sotelo (Director Business Development , Scandinavian Business Seating)

Schneider Electric

Under a short time constraint, Interconnection was able to deliver an outstanding study that exceeded my expectation in terms of quality and market breadth. I highly recommend Interconnection to anyone in need of market research.

Jeff Canterberry (Director of Strategy and M&A, Schneider Electric)

Österreichs Personaldienstleister

The sales management tool ZAIS has become indispensable for many Austrian temporary staffing providers for fast and correct sales management decisions. A tailor-made online cockpit provides comprehensive monthly figures and data on temporary work and the labor market in Austria, while at the same time impressing with its overview and intuitive user guidance. Interconnection Consulting has consider individually to all user needs during development process and also convinces with fast response times during operation.

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Admonter

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Kontron

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Sodexo

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