‘We can’t see ahead’: Türkiye’s furniture capital struggles with economic woes

Inegol, a district in Bursa, Türkiye, known as a key center of the furniture industry with around 4,700 companies, is facing a significant downturn in 2024, as rising costs and inflation have slashed sales and exports, forcing many businesses to shut down.

According to gazeteduvar.com.tr, sector insiders remarked that since 2022, furniture prices have tripled due to increased raw material and labor costs, such as a sofa set that once cost ₺15,000 ($414.01) to produce now exceeds ₺30,000, with retail prices starting at ₺45,000.

The rising costs and a suppressed exchange rate have reduced domestic and international sales.

According to the Inegol Furniture Chamber, 221 furniture companies closed in 2024, while the Bursa Chamber of Commerce reported that 6 firms declared concordatum and 7 declared bankruptcy.

Factories struggle with raw material shortages

“We had 14 employees; now we’re down to 6,” said sofa producer Halil Unlu, who saw sales fall by 50% since 2022. “We can’t see ahead. A sofa set leaves our factory for ₺45,000 and reaches consumers at ₺100,000. Who can afford that?”

Exporters also face challenges. “A sofa we sold for €1,100 ($1.152) now costs €1,500, which European customers find too high,” said an exporter. “Sales have dropped by 50%, and Türkiye is no longer a cost-effective supplier for Europe.”

Table manufacturer Fariz Baran said production shrank by 60% in the past two years. “We shut down one workshop and cut our workforce from 20 to 10,” he said. Particleboard, a key material, has seen multiple price hikes.

“One supplier, Starwood, dominates the market and manipulates supply by limiting production,” claimed furniture maker Orhan Dogan. “I waited 42 days for walnut-patterned boards.”

Exports decline amid exchange rate challenges

“Our exports dropped by 70% in two years,” said Umit Ozturk, who manufactures bedroom sets. “We shipped 300 sets monthly; now we struggle to send 100. Labor costs have quadrupled, and high prices are scaring off buyers.”

The suppressed exchange rate exacerbates the issue, furniture manufacturers asserted. “If the dollar were at ₺42 instead of 35, our products would be more competitively priced abroad,” said exporter Ozkan Sahin. “A bedroom set costs €1,142 today; at a fair exchange rate, it would be €950.”

Sahin uttered international buyers are turning to cheaper markets. “Our €1,500 sofa set sells for €800 in China,” said Sahin. “Even with Türkiye’s logistical advantages, customers prefer cheaper options abroad, including Poland, Italy, Germany, and Malaysia.”

As production shrinks and costs rise, the future of Türkiye’s furniture hub remains uncertain, leaving businesses to navigate an increasingly challenging landscape.