The furniture market will be affected in 2009 by a decline in lending, which will influence the durable goods market, and by a slowdown of the construction sector’s growth rate.
“Durable goods are purchased mostly with loans and in installments. If banks no longer offer advantageous lending conditions, individuals will limit themselves to what they can afford. The construction sector is equally important: the market needs new housing units, there is demand, but a higher price for homes and loans leads to a drop in furniture sales,” said Viorel Catarama, Elvila’s founder. The market will also be influenced by higher costs of raw materials and utilities.
Elvila currently has 1,700 employees. Company officials estimate salaries will rise by 10 percent at most in 2009. The average salary amounts to RON 1,450 (some €377.3).
The firm’s 2009 investment program will not be affected by the financial crisis, considering most of the company’s investments were financed from profit rather than loans. “Our financial independence will help us meet our planned investment program. The group will adapt its development strategy based on the local and global economic context,” said company officials.
The value of the Romanian furniture market is estimated at €1.2 billion, and its main players are Mobexpert, Ikea, Staer, and kika.
