The BFM (British Furniture Manufacturers) has revealed that the falling pound has increased the cost of material imports for furniture manufacturers following the Brexit decision, with confidence at a three and half year low.
According to the BFM’s latest Commodity Price Data System, the data highlights how the fall in value of Sterling against the Euro and US Dollar has seen suppliers ask for significant increases in the cost of materials such as chemicals that feed into foam.
Polyol Flexible and TDI rose by over 7% against the Euro between the 22 June and 29 June 2016, which was entirely the effect of the exchange rate. The BFM indicate that this will be mirrored with other material inputs.
The BFM also revealed that confidence within the sector, pre-Brexit, was at a three and half year low, with both output and new order intake trending in the wrong direction, in its June 2016 State of Trade Survey conducted before the Brexit result.
However, according to its Financial Ratios Survey, in terms of profitability, the report, which looks at the four ratios to sales of direct materials and labour, overheads, profit and distribution costs, suggested that last year was the most successful for the industry as a whole for some time, with only 5% of the sample making losses.
For more information, visit BFM.