Furniture industry suffers amid cost-of-living crunch  

AMMAN — The furniture and home furnishings industry is struggling with low demand as economic challenges squeeze consumers’ spending power, say stakeholders. 

Head of the General Syndicate for Traders and producers of Furniture Sharaf Al Hayajneh noted that most retailers are struggling to survive, burdened by debts and rising operational costs. 

“Sales are declining, while the costs of goods, energy and transport continue to rise,” he told The Jordan Times. 

This year, demand has dropped by 50 per cent compared with 2020 and 2021, according to Hayajneh. 

The post-pandemic period witnessed a slight increase in demand, but not as much as hoped for, he said. 

Over 300 furniture retailers permanently closed their businesses over the past two years, according to Hayajneh, who noted that layoffs are becoming increasingly common. 

While sales begin to taper with the advent of winter, the summer season, marked by weddings that boost sales, is an anticipated time for retailers, he added.

However, the demand during the summer of 2022 was “below expectations”, he said.  

He attributed the disappointing turnout to the purchasing power and decreasing demand. 

Nowadays, people are struggling to pay for basic necessities such as groceries and rent, so there’s no room for high-end purchases and luxury items, Hayajneh said. 

“A lot of people are in debt, and 90 per cent of customers pay with monthly installments through banks or finance companies,” he added. 

Local furniture retailer Hussain Ghawi said that the furniture industry has been on a “rocky path” since the beginning of the COVID-19 pandemic. 

The tough economic situation, which is forcing consumers to adopt a more frugal spending approach, is the main reason behind the stagnation in the industry’s sales, he told The Jordan Times. 

“A cushy new sofa or mattress isn’t a priority for Jordanians, who are dealing with soaring fuel prices and high unemployment rates,” he added, noting that most households are tightening their belts.  

According to Ghawi, the wedding season during the summer usually boosts sales, while winter witnesses roughly a 70 per cent drop in sales. 

“The period between December and March is the toughest,” he said. 

Ghawi also pointed out that the year 2022 was marked by an approximately 20 per cent decrease in shipping costs, which had increased by 40 per cent after the outbreak of the pandemic.

Hayajneh said that the volume of locally manufactured products has exceeded that of exported ones over the past two years.

He also said that the industry is currently dealing with an issue where importers are bringing used furniture from Europe and Gulf countries into Jordan under the pretense of personal use in order to avoid taxes and customs fees, and are then reselling it in the local market. 

This issue has been going on for years but it increased over the past two years after the outbreak of the COVID-19 pandemic, he said. 

“This will harm the ability of local products to compete in the market, and it has already decreased the imports of new furniture items by roughly 40 per cent,” he added. 

Workers in the industry make up no less than 30 to 35 per cent of Jordan’s labour force, according to Hayajneh.