Following a challenging year in 2023, bed manufacturers and suppliers continue to hold a cautious outlook for 2024. According to the latest State of Trade survey conducted by the National Bed Federation (NBF), only a small fraction of manufacturers and suppliers reported demand exceeding expectations in the latter half of 2023.
The survey, which gathered responses from 49 companies, including 39 manufacturers and 11 suppliers, shed light on various aspects of the industry, including demand, prices, costs, margins, and employment trends.
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Tristine Hargreaves, Executive Director of the NBF, commented on the findings, stating, 'While demand in the latter part of 2023 was marginally better than the first half – not least because autumn is usually the highest performing time of the year for sales – it remains subdued, leaving both manufacturers and suppliers disappointed that there is still no sign of improvement.'
Compared to six months ago, the outlook appears notably bleaker, especially for manufacturers, with a mere 11% expressing optimism, contrasting sharply with the 46% who hold pessimistic views. Suppliers, though slightly more positive, still express cautiousness, with 20% feeling optimistic and 40% pessimistic.
Given the subdued demand, it's unsurprising that lead times have become less of an issue for many. A significant portion of both manufacturers and suppliers expect no changes to their current lead times in the near future, barring any unforeseen disruptions in the supply chain.
While most costs remained stable for a considerable portion of manufacturers, there was an observable trend of rising prices across various components, particularly energy. This upward trend in costs is expected to continue, with freight costs anticipated to rise, especially concerning shipping via the Red Sea.
Despite the challenges, some manufacturers and suppliers have managed to mitigate rising costs through price increases or operational efficiencies, leading to improved margins for a notable percentage of respondents. However, there remains a significant minority facing squeezed profit margins.
In terms of employment trends, while there were reductions in headcount and redundancies in the second half of 2023, the pace slowed compared to the first half of the year. Looking ahead, a sizeable portion of both manufacturers and suppliers anticipate increasing their workforce in the coming months.
Moreover, there is a growing interest in exporting among industry players, with nearly half already engaged in exporting activities and a significant proportion exploring opportunities to expand their presence in international markets.
More information:
National Bed Federation
[email protected]
www.bedfed.org.uk