Although the Argentine furniture industry faces a difficult present, it is working for a promising future hand in hand with profound national and international development, so that – like a good wine or a spectacular steak – it is recognized worldwide for its design, talent and excellence of materials. He Argentine Furniture Institute – IMA – represents and integrates the entire chain, constantly striving to offer services directly linked to the interests and needs of each of the actors that make it up. In what has been a profound economic transformation – marked by a government strategy of fiscal adjustment and inflation control that has significantly impacted the productive sectors – the shock was felt especially in construction, wood and furniture.
The mechanical wood processing industry covers a wide chain of sectors, including sawmills, furniture manufacturing, panels, wood construction and on-site carpentry. Currently, all these sectors are going through a marked recession. Although the intensity of the recession varies between them, the severity is a common element throughout the chain. The official economic policy, focused on a managed devaluation and reduction of inflation, managed to reduce the monthly rate from 20.6% in January to 2.7% in October. However, this objective was achieved through a contraction in aggregate demand that caused a drop in the level of economic activity of 3.3% year-on-year.
Today, the sector is going through a complicated situation – hit by the drop in domestic consumption and the opening of exports – but, at the same time, it is raising its profile to give visibility, significance and strength to one of the sectors of Argentine industry with the greatest potential. to be an international reference and a true economic engine for the development of the country.
In a recent report, the Argentine Federation of the Wood and Related Industries (FAIMA) – the only 2nd degree entity that represents the Wood Industrial Sector at the national level through its 28 associated Chambers in the different provinces of the country – highlights that he impact of the recession on companies linked to furniture manufacturing has been significant, with a decrease in the sector’s production of 37% year-on-year, according to the INDEC IPI.
This decrease is even more serious in SMEs, where the drop in production reaches 60% in some cases. These declines have affected not only the level of plant utilization, but also the number of shifts worked and, in some cases, the level of employment. Many of these companies are located in towns in the interior of the country, where they are the main generators of local employment, which highlights the importance of their productive viability for regional economies.
Likewise, the increase in production costs is worrying, both due to the increase in inputs and the cost of public services, which have increased on average by 500%. These increases have been difficult to translate into prices in the current recessionary context, which has seriously affected the profitability of the entire chain.
And another of the most significant points has to do with the possible elimination of technical regulations that goods linked to the construction, wood and furniture sectors must comply with. These regulations are essential to ensure the quality and safety of the products chosen by consumers. They guarantee that the furniture complies with safety measures that prevent domestic accidents with potential risk for people. If eliminated, it could allow the entry of imported products of inferior quality that do not comply with the necessary regulations to avoid potentially harmful accidents for users.
At the same time, The economic crisis has generated an export boost. Total exports grew by 15% in the first nine months, with furniture increasing by 23% and lumber by 11%. This external dynamism contrasts with the weakness of the internal market, strongly impacted by the fall in real income. The trade balance reflects this complex reality: while the wood sector shows a growing surplus, the furniture sector maintains a negative balance. Imports, after a sharp initial drop, began to recover in the middle of the year, especially in the furniture sector.
In terms of employment, all sectors recorded losses, with construction being the most affected with a reduction of 14.6% year-on-year in the first quarter. The last months of the year show incipient signs of recovery, although activity levels still remain below those recorded in 2022 and early 2023. This panorama shows a year of economic transition, where stabilization policies have generated a complex scenario for national production, with differentiated impacts between sectors and a recovery that is still incipient and fragile.
But, the panorama is filled with brilliance and excitement with the imminent realization of the Project Desire Exhibition – 2024 Edition, an exhibition that will show the latest trends in furniture design and furniture systems, materials, creativity, innovation and pieces that will be protagonists of Argentine furniture of the future. It will be held at the Palacio Libertad, from Thursday, December 12th to Sunday, December 15th, from 2:00 p.m. to 8:00 p.m., with free admission. This exhibition is the crowning of a work plan that was carried out during 2024, in which more than 20 furniture manufacturing companies joined together with prominent designers, to promote innovation throughout the chain and thus improve both production and product offering on the market. This joint effort seeks not only to strengthen the furniture industry, but also to promote Argentine design to new levels of excellence and competitiveness.
It will be a unique opportunity to discover the 21 prototypes of furniture and furniture systems that participants developed during the year. In addition to walking, discovering and admiring the creativity poured into each piece of furniture, maximum innovation, excellence in materials and the birth of a new DNA in terms of Argentine design of furniture and accessories.
In fact, Project Deseo’s main objective is to create a productive link between design and the furniture industry. This not only symbolizes a step forward for the furniture industry, but also a commitment to creativity and collaboration as drivers of development. With the active participation of businessmen and designers, this program is expected to generate high-quality products and innovative design, consolidating Argentina as a benchmark in the furniture field.
*Pablo Bercovich is a FAIMA advisor at the IMA and coordinator of Proyecto Deseo
by Pablo Bercovich
