January-August furniture exports drop 20%

As the United States economy worsens, the volume of furniture exports from Cebu plunged by an estimated 20 percent from January to August of this year, the lowest industry decline in the last four years.

Based on the number of containers shipped from the port of Cebu, to different countries, especially the US, in the first eight months, there were only a total of 10,379 containers shipped, compared to 12,543 shipped in the same period last year.

Despite this indication, furniture exporters here are confident that depressed performance will have its turnaround, probably in the first semester of next year.

“We would like to believe that we are going to have a more positive outlook by next year,” said Charles Estreegan, Cebu Furniture Industries Foundation (CFIF) board member, and chairman of Cebu X 2009 Design and Product Committee.

He said although the US recession has slapped a more challenging environment for the furniture exporters here, he said there are also a lot of reasons to believe that the industry will finally land with a positive turnaround next year.

Estreegan said companies must continue “what they are doing” right now, specifically in strengthening their respective niche in the market, and adopting a slowdown in their operations is not encouraged.

Although Estreegan did not mention the factors that will possibly save the furniture exports’ further decline, he said “there are a lot of opportunities that will be maximized by the players amid the crisis.”

Cebu furniture exporters are exporting about 80 percent of their products to the United States. The United States’ economic slowdown, which started with the sub-prime and housing depression has brought about adverse effects to the industry in the last couple of years.

CFIF executive director Ruby B. Salutan said despite the slackened market performance, players are urged to maximize opportunities in other countries, such as Russia, Europe, and other continents.

According to Estreegan the outdoor furniture sector is now doing very good, while the other areas are flat. Players just have to be very careful in identifying their niche and market potential.

Besides, Salutan said Cebu’s positioning as high-end to medium-range furniture makers has also helped sustained the industry to survive.

The estimated 20 percent furniture export decline is sourced from the actual shipment made by the furniture exports at the Cebu International Port (CIP). In availability of figures from concerned government agencies to provide concrete figure of (furniture) export performance, pushed CFIF to use the shipment volume as indicator of the industry’s update.

The furniture export industry in Cebu, experienced an all time high [export value] dropped in 2003, with 24 percent decline of furniture exports from Cebu.

In the last two years, the furniture export trade in Cebu had experienced “horror” times, losing about 25,000 jobs from streamlining, and cost cutting measures of companies. —Ehda M. Dagooc