Cebu exporters forecast: Faster recovery in 2015 seen
Cebu exporters hope to see a faster recovery next year as economies in their major markets start to improve.
They are hopeful especially with the positive economic developments in the United States and Europe which are their main markets, said Robert A. Booth, Cebu Furniture Industries Foundation Inc. president in an interview last week.
“The economy in the United States has shown some improvement and that gives us hope that we get to finally see some concrete recovery for the industry,” he said.
This can fuel growth in the real estate industry and access to credit easing out in America. This will then fuel demand for pieces of furniture.
“Once the current tight credit condition shows improvements, the furniture sector is expected to gain its ‘muscle’ again and we can expect higher orders. The housing market including purchases in home furnishing is closely dependent on credit availability in the United States that is why easing out of credit conditions will really signal the start of more purchases from the market,” he said.
Booth added that aside from the tight credit due to bad economic condition in the US market, the furniture sector is also affected by the evolving lifestyle especially among the younger generation which he described as “mostly minimalist” when it comes to their furniture choices.
“They (younger generation) are more conscious in keeping up with the latest in the gadgets market, and that is where most of their money go to. It’s a top priority over furniture or home furnishing for them,” he said.
Booth, however, said that like fashion, the furniture industry has a cycle that keeps coming back.
He said they remain confident that there will always be a market for their products around the world as there will always be people who will want to buy pieces of furniture.
“Someone will get married soon and will buy a home. Thus, they will need pieces of furniture,” he said.
Other furniture exporters have also started diversifying to other markets including the local markets just to survive.
“For our part (Mehitabel, Inc.) however we decided to stick it out with the market we are most knowledgeable of which is the US.
Maybe when my children takes over they may decide to look at other markets, but, for now, we are still very much focused in the US,” he said.
From about 150 members, CFIF membership went down to 75 companies with most companies still operating at downsized numbers.
Mehitabel Inc. has downsized its manpower to 350 people and one factory, from two factories of 1,500 manpower in 2008.
He said everyone is hopeful that 2015 will be a better year for them.
He also said that they only expect a 5 percent growth in the industry by the end of the year.
Based on trade statistics provided by PhilExport Cebu Executive Director Fred Escalona, the Philippine exports register positive growth rates until June 2014.
“The first semester growth of outbound goods registered an increase at an encouraging 21.4 percent pace. Preliminary 3rd quarter performance was also very good for the export sector, as merchandise exports rose by 15.7 percent,” he said.
Electronics, however, remain their major export product.
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