In the first half of this year, major cities in the Pearl River Delta, including Guangzhou and Shenzhen, experienced a new wave of furniture price increases. This trend is driven by multiple factors such as rising raw material costs, reduced export tax rebates for furniture, and higher labor and sales expenses. Particularly affected are items like beds, mattress, sofas, and
Other furniture accessories. Compared to the same period last year, the prices of raw materials and labor have gone up by 10% to 30%, leading to a corresponding rise in ex-factory prices across different furniture categories.
According to industry reports, the cost of interior materials—such as aluminum used in hardware components, stainless steel, and chemical products like paint and glue—plays a significant role in furniture price fluctuations. These materials are essential for manufacturing and their increasing costs directly impact the final product pricing.
Manufacturers are feeling the pressure more acutely than distributors when it comes to deciding whether to raise prices. Many furniture makers in the Pearl River Delta plan to adjust their pricing again in September and October to cope with ongoing raw material cost hikes, expecting an increase of between 10% and 15%. Wang Li, executive secretary general of the Dongguan Famous Furniture Club, noted that some smaller furniture companies have already shut down due to these pressures.
Labor costs also represent a major portion of the furniture industry's overall expenses. With the new "Labor Contract Law" now in effect, companies must provide five types of social insurance for employees, including pensions, unemployment, work injury, maternity, and medical coverage. This regulation has significantly increased labor costs, squeezing the already thin profit margins of many businesses. Industry experts believe that the tight supply of wood and continued price increases will be a long-term trend, placing continuous and substantial cost pressures on the domestic furniture sector. Zhu Changling, vice chairman of the China Furniture Association, stated, “With limited resources and rising raw material prices, the cost of household goods—including furniture—is expected to keep increasing.â€
On the retail side, major furniture stores have started to implement strategies to manage the rising costs. While factory prices have gone up by 15% to 20% due to higher material and labor costs, retail prices in major home furnishing stores in Guangzhou have remained relatively stable. In addition, with the peak season for home construction and decoration approaching in July and August, several promotional campaigns have been launched. Stores are also using combined sales tactics to stabilize prices and absorb the cost increases. (Editor: Peter)
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