The BFM’s June State of Trade Survey is important, as it comes mid-way through the year and looks back at actual performance over the preceding months and expectations for the coming period. On balance, the industry is showing its first positive view of the general business situation in June since the recession began in 2008.
The BFM’s survey concurs with the latest British Chambers of Commerce quarterly analysis, which showed that business confidence was at its highest for six years.
Furniture manufacturers appear to be seeing a ray of hope, having suffered a poor trading climate for so long, one perhaps which is not fully reflected in actual performance yet. However, new order intake and total output all showed signs of improvement, which was expected to continue as we headed through the summer into autumn.
"Most companies that purchased leather experienced price increases for these products of 6% on average in the last four months"
Gross profit margins on balance too showed a positive trend, and, according to official Government figures, materials and fuel purchased by furniture manufacturers were only 0.3% higher in May 2013 than the same period last year.
Notably, however, the state of trade survey shows that most companies that purchased leather experienced price increases for these products of 6% on average in the last four months.
June is also the time that the BFM surveys financial ratios in companies, which is another measure of performance. The survey analyses four ratios as a percentage of sales (the combined total making 100%). It looks at total overheads, distribution costs, direct labour and materials, and net profit.
The survey showed that only 12% of the respondents reported making a loss (8%) or being at break-even (4%). This compares to an equivalent figure of 42% in 2012 year and 48% in 2011.
For further information contact the BFM.
