Thai furniture spending to grow 3.1% in 2022

This is following a 1.1% increase last year.

Thailand’s furniture spending is expected to increase by 3.1% year-on-year in 2022 as the country’s domestic economy is seen to continue its growth, according to Fitch Solutions.

In a report, Fitch said the furniture retail sector in Thailand was adversely affected by the pandemic, contracting 4.5% in 2020 and only rising 1.1% last year despite low base effects.

It said that whilst movement restrictions have tightened and eased alongside the rise and fall of cases in Thailand, non-essential retail such as furniture stores were limited to online operations and deliveries to reduce unnecessary foot traffic and implement social distancing.

The 3.1% growth forecast in furniture spending is in line with Fitch’s Country Risk team’s forecast of domestic economic growth by a real rate of 3.5 YoY, following a 1.6% YoY growth in 2021 and 6.2% contraction in 2020.

“As Thailand continues a cautionary reopening of its economy, we believe that this trend would encourage households to increase their spending, allowing growth to remain sustainable,” it said.

It noted recent developments in the furniture industry such as Swedish home furnishing retailer IKEA’s announcement of a new store in Bangkok, which indicates the firm’s confidence in Thailand’s furniture sector and the recovery of its economy.

Fitch also said that inflation is forecast to average 2.5% yearly until 2026 which suggests that real income of Thai households will also grow between 2022 and 2026.

“We believe that the increase in real income will result in a greater propensity to spend, allowing households to gradually move away from the 2020-2021 focus on essentials and provide consumers with higher propensity to spend on non-essential retail such as furniture and furnishings,” it said.