Thai furniture exports are likely to contract both this year and next, but the domestic market should grow by 15% as flood victims renovate their homes.
Jirawat Tangkijngamwong, president of the Thai Timber Association and secretary-general of the Thai Furniture Industries Association, expects a 10% decline in exports this year from 37.1 billion baht last year, failing to meet the earlier projection of 10% growth.
The Department of Export Promotion reported furniture exports from January to October this year totalled 29.3 billion baht, down by 5.46% year-on-year.
The flood cut exports in October by about 20% and the situation is unlikely to improve this month because exporters still face logistics problems, causing buyers to source from other countries.
The associations predict an inactive export market in the first quarter next year, as most Thai exporters are small and medium-sized companies that will still be renovating.
They predicts the market will resume by the second quarter.
Costs may rise 10-20% next year due to an increase in minimum daily wages and possibly raw material costs, which could reduce exports by 20% from 2011.
Mr Jirawat said Thai furniture exporters should look to high-potential new markets such as Asean, China, India, Brazil, Mexico and Russia, as traditional markets such as the United States, Europe and Japan face economic problems.
Mr Jirawat estimated the domestic furniture market would reach 40-50 billion baht this year, growing well into next year on the strength of low to mid-priced pieces.
He believes consumers will shift from buying build-in pieces to knock-down furniture.
"Consumers will pay more attention to material that can withstand water damage such as wood, buying less pieces made from plywood or medium-density fibreboard," he said.
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