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Malaysia: A Half-year Outlook

By Nicole Liang

Exporters see increased orders from design- and quality-conscious markets while demands within Malaysia continue to favour low-cost alternatives.

Malaysia’s furniture export has experienced substantial growth in recent years, and although it will likely be slowed by the current economic slowdown, furniture exports remained strong through most of 2008, the Malaysian Furniture Promotion Council (MFPC) said. As of May 2009, furniture exports in the first five months posted a 13.3 percent decline to RM 2.95 billion (US$842.22 million), from the same period of 2008. The US remains the main destination for Malaysian furniture showed to a total export of RM 832.3 million.

Shipments to Saudi Arabia, France and the Netherlands posted encouraging double-digit growths of 33 percent, 16 percent and 12 percent respectively, suggesting notable product improvement in Malaysian furniture, since these are markets known to be comparatively more design- and quality-conscious. Aesthetic and well-made Malaysian furniture have thus managed to remain competitive among discerning buyers despite conservative consumer spending worldwide.

Exports 2008-2009 (Jan-May)

Values in RM millions

Export by type 08/09 (Jan-May)

Values in RM millions

Philippines: A Potential Market

The Philippines was ranked top 15th importer of furniture from Malaysia so far this year. The country imports US$76 million in furniture annually. Furniture consumption is estimated at US$650 million yearly, a report by the MFPC said.

Malaysia’s furniture exports to the Philippines were RM 56.1 million in 2005. In 2006, the figure was RM 64.4 million. The rate of growth accelerated in 2008 to reach RM 81.2 million, an increase of 22.6 percent year-on-year. In the first two months of 2009, growth continued at 8.1 percent over the same period in 2008.

Wooden furniture continues to take the largest share of the Malaysian furniture exported to the Philippines. In 2008, Malaysian wooden exports rose to RM 67.43 million, up 25.6 percent. Wooden furniture constituted 83 percent of all Malaysian furniture exports to the Philippines. Demand was mostly for bedroom and kitchen furniture.

The next category was seats and related parts. In 2008, they were worth an export value of RM 5.5 million, up 2.6 percent, and accounting for seven percent of all Malaysian furniture exports to the Philippines.

The demand for metal furniture, however, declined by 9.1 percent to RM 5.1 million in 2008. Metal furniture constituted six percent of all Malaysian furniture exports to the Philippines.

The Furniture Sector In Philippines

Imports 2008-2009 (Jan-May)

Malaysia’s Furniture Imports, by type 2008-2009 (Jan-May)

Furniture imports posted a 25.2 percent decrease to RM 409.3 million in the first five months of 2009, from RM 546.8 million in the same period of 2008 with China being its number one importer. Malaysians who are tightening their belts seem to favour Vietnamese imports, another low cost alternative to China-made furniture.

The mix of import and export origins reflect Malaysia’s natural diversity, which provides ample variety for the local as well as the world’s furniture needs, MFPC said.