The Polish furniture industry is facing severe financial strain as cheap imports from Asia flood the European market, leading to mounting debt and waning profitability. According to the National Debt Register (KRD), the sector's arrears have soared to PLN 130 million, with over 3,200 companies affected. The average debt per firm now exceeds PLN 40,000.
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Rising production costs, declining domestic demand, and aggressive price competition from China, Vietnam, and India are undermining Polish manufacturers, particularly those producing office and shop furniture. These products are often made under less stringent environmental regulations abroad, enabling lower prices. Imports rose by more than 10% last year, while export values declined by 6%.
The situation is exacerbated by stagnant housing markets and limited credit availability, partly due to geopolitical uncertainty. Falling margins and extended payment terms have put intense pressure on cash flow, especially for micro and small businesses. These firms, many of which operate as sole proprietorships, account for over half of the industry's total debt.
Debt among furniture retailers also remains high, with 795 companies owing nearly PLN 39 million. Additionally, the wood industry, integral to furniture production, is carrying over PLN 100 million in unpaid liabilities. Credit tightening, inflation, and elevated material costs are further weakening the sector's financial resilience.
Polish furniture companies now owe the most to securitisation and debt collection firms, totalling PLN 52.9 million, followed by banks and leasing companies. The most indebted regions include Wielkopolska and Mazowsze.
Despite a reputation for craftsmanship, the sector is struggling to maintain liquidity, with even historically stable firms now migrating to "medium-risk" credit categories. As one expert warned, 'more companies are being forced to choose between staying afloat and settling their obligations'.
Source: www.biznes.meble.pl