OFFICE FURNITURE MARKET ANALYSIS

Fluctuations in raw material prices have significantly restrained the growth of the office furniture market in recent times. Office furniture manufacturing relies heavily on various raw materials such as wood, metal, plastic, and leather. However, the prices of these raw materials have witnessed high volatility over the last couple of years due to various global and local factors. This volatility in raw material costs has constrained the office furniture manufacturers from undertaking aggressive capacity expansions and new product launches. It has also impacted their profit margins considerably as high input costs could not be fully passed on to the customers. This unpredictability in raw material costs poses planning challenges for manufacturers and discourages long term investments. With economic activities reviving gradually post pandemic, the global demand for office furniture is projected to grow over the coming years. However, uncontrolled inflation in key raw material prices continues to undermine the stability and steady growth of this market in the near future, unless addressed strategically.

Opportunities: Growth of co-working spaces

The rise of co-working spaces has been one of the biggest trends to emerge in the commercial real estate sector over the past decade. As remote work has increased flexibility and more entrepreneurs and small businesses operate virtually, the demand for shared, flexible workspaces has surged. According to data from a leading flexible workspace provider, WeWork, the global co-working market grew over 30% in 2020 and is expected to continue expanding by over 25% annually through 2023. This rapid growth of co-working is creating an enormous opportunity for office furniture providers. Unlike traditional offices with long furniture replacement cycles, co-working operators need to quickly and regularly refresh their spaces to keep up contemporary design trends and cater to a diverse set of clients. This means a constant need for new chairs, desks, storage units, and other modular furniture pieces that can be easily reconfigured as members and floorplans change. Rather than large one-time purchases, co-working operators spend steadily on inventory through furniture subscription and rental programs.