Failures Predicted in Furniture Making

from a special Correspondent. The collapse of a significant num»er of domestic furniture manufacturing businesses is fore-shadowed in an economic report being circulated throughout the industry. Present order books, at current rates of production, are only equal to one month's deliveries to the trade and are the thinnest for four years. The industry's central forecasters, who have a good record in predicting trading conditions, expect deliveries to stagnate for the third year running at around £158m. Many factories are operating well below capacity and short-time working has been introduced in the hope that the Government will soon ease the credit squeeze, so preventing the disbanding of labour teams. The report prepared by the Furniture Development Council says manufacturers cannot expect much improvement in trading conditions in the first half of this year. Repayment of SET and receipt of premiums, together with training board refunds and investment grants, are seen as a form of aid to relieve the "now possibly serious liquidity position" of manufacturers, "For some firms, however, these improvements will be too small and come too late," warns the report. "Consequently, the total number of firms manufacturing domestic furniture will probably decline quite significantly in 1967. With a few notable exceptions, the companies best prepared for 1967 are those that have diligently built up sizeable export and/or contract markets, and whose fortunes do not therefore depend entirely on their performance in the increasingly competitive but, at present, virtually stagnant market for domestic furniture", Fierce competition in all major European markets is seen this year and aggressive counter selling is already reported in the case of German producers, who are faced with deteriorating home market. In the home market, the FDC expects the car industry to cream off much of the initial benefit of any pick-up in consumer spending and demand for furniture is thought unlikely to start reviving in the last quarter. Some of the most severely affected companies are said to be those making bedroom furniture, though these producing kitchen and dining furniture only have six weeks! work on hand on current order levels, After spending record sums last year on advertising only to suffer new H.P. restrictions under the July economic measures, the industry has now cut back arpropriations severely. The jointly sponsored "Old Furniture Must Go" campaign is already postponed until the economic situation improves. In the retail sector, multiples (very dependent on credit sales) appear to have been suffering worse than independents and competition for sales in 1967 (trade was worth £332,1m., including bedding last year) is expected "to increase markedly", The F.D.C. points out that mail order houses have been showing a rapid growth in furniture business and H.P. restrictions "will undoubtedly result in some transfer of purchases to the mail order houses since their policy is to offer interst free credit over a period of up to a year", The Trade Unions for the Furniture trade will nodoubt be faced with the prospect of large scale sackings because of the situation. It will be as well for them to start preparing now to meet this situation.