Because of the worldwide growth in the consumption levels, there are opportunities for Brazil to regain its space in furniture exports. This morning, economist Marcelo Prado, director of IEMI Market Intelligence, presents at Movergs Conference for the 13th consecutive year, an overview of the Brazilian furniture market, showing the challenges of rebound in supply and consumption.

To contextualize the issue, Prado points out that international trade stalled in 2009, affecting production in 2010, but afterwards it restarted to grow. Brazil, however, did not take advantage of this growth, since it was focused on the domestic market. The lost space in exports had a great impact on the current negative performance of the sector. According to him, currently the industry needs a safe exchange rate that offers real conditions to restart negotiations in the foreign market, which takes from five to ten years to happen. "A developed country is an industrialized country. We cannot give up our manufacturing industry, nor our presence in the foreign market," he says.

Each center in the whole furniture industry has suffered in recent years. Very small companies were the least affected; small and medium-size factories, those that have little added competitive edge, were the ones that suffered the most. The two most important products in the industry – furniture for bedrooms and offices - had their worst performance last year. Data presented by the economist show that the first companies to resume their growth at the end of the crisis will be those that have kept investing in product mix, added value, service and a competitive edge throughout these years.

The good news for the sector is that in May 2017 the furniture production surpassed the same period of the previous year. According to Marcelo Prado, the industry is expected to keep producing more than in 2016 for a few months so that, at the end of the year, although there is no real growth, the numbers of the furniture sector are not negative. "The second half promises improvement in the workers’ income, with lower interests and level of indebtedness – somewhat improving the consumption in the domestic market as well. At this moment, improving is better than falling," he says.

Exports are already growing and it is a good period for the furniture industry to focus on the foreign market. This time, the economist advises to think of it not as an alternative with cheap productive base, but as an alternative with different innovative products, featuring concept and originality. "Our best product to sell abroad is wooden furniture, since we are competitive worldwide. Santa Catarina, Rio Grande do Sul and Paraná lead this export, having the United States as their main destination."

In the domestic market, the niche that promises better demand and willingness to consume – including furniture, cars, real estate - is the upper-middle class. Consumption of semi-durable goods has already increased such as fashion. Not by chance, furniture sales is last one to increase, according to Prado. The reason for this is that this is one of the sectors that least invests in innovation, which makes the rebound more difficult. A growth of approximately 13.6% is expected in the next five years, after eight years of loss in the market.

The greatest opportunity, concludes the speaker, is the power of transformation in the wood and furniture industry. Think strategically and focus on the regions that add more value, on the retail channels that add more value and on the segments that least lost space. "We have to think effectively about competitive edges, pricing and turnover in the POS. There is a group of companies that grows despite the crisis," he says.